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Brocade Communications Systems, Inc. Message Board

  • prinz_eugen_ii prinz_eugen_ii Sep 25, 2013 2:48 PM Flag

    I Don't Understand Buyback

    How can they afford a $1b buyback when they don't even have that much cash on hand, not to mention debt owed, and falling revenue. Oh, and I guess that means they've completely given up on any R&D which is the key to future growth. I don't know what this new mgt is thinking. I understand that it makes for a good headline, and should provide a short term pop, but the insiders have already been selling their shares, so why announce now? Maybe they plan to sell more?

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    • Perception goes along way.

    • Its just that a PR stunt to authorize a buyback larger than your cash on hand.Are they going to spend every cent that they have and then borrow money to buyback shares?
      I 'm frankly a bit surprised that LLoyd has stooped to such lowly tricks to boost the share price.The market appears to have seen thru the ploy from today's ending price actionThe chumps at the start of the day fell for it and sharper minds prevailed by days end.

    • It's over a period of time, its not all done at once. It's very bullish, they are being very aggressive and buying back shares hands over fist. Few years ago BRCD had 550M share outstanding but the end of this year we will be under 400M and I would be high probability that we will be bought out before years end.

      50% of the free cash flow is going towards the buyback and BRCD is very profitable and very focused on shareholder value for the first time in a decade. Well I guess I should say it all started with the new CEO.

      I think this is $12 - $15 stock but we will need a few more quarters for them to lay out the cards and show investors what is taking place and that all is if BRCD is bought out before much of this unfolds.

      Sentiment: Strong Buy

 
BRCD
12.54+0.52(+4.33%)May 22 4:00 PMEDT