Last quarter Nvidia gave their investment banker instructions to buyback $100M. When settled they got 8.3M shares for an average price of $11.94. At the investment day presentation, Nvidia management said they were going to buy back $100M this quarter and $600M spread over Q2, Q3, and Q4.
I've seen lots of Accelerated stock buybacks in Semi's, but this one is strange. It's so piece mill, usually companies jump the shark and do it quickly...not spread over 5 quarters.
This begs the question......Are they trying to play the summer slowdown and get a better price or is Nvidia thinking that their investment banker being in the market opportunistically puts a floor on the price per share. And if so, why not buy at the cheapest price.
I think it is a good question and I can only offer some input and speculation on my part.
They said they would purchase the shares before end of year.
In other words they can purchase everything before Q4 or earlier if desired.
Hoewever they are probably careful not to create an artificial bubble where they push up the stock price with their purchases.
If they bought all almost at once (one extreme) then they could probably push the pps to 15 with the strong buying pressure and momentum traders on the stock. Hence the stock would not be all cheap to purchase anyway.
After their buying subdues the traders and shorters will have a strong oppertunity to knock the pps down again and the charts will look ugly again.
So stretching out the purchases through a longer period gives a more stable and believable rise to the stock pps.
Perhabs they even only purchase in down days on Nasdaq to provide the stable floor and to avoid putting oil on the fire in the up days.
I look forward to other poeples' insight on this matter.