>And of course it's not just to boost the stock; it's often required to
>cover options you've given your employees. Microsoft and Intel are two
>prime examples of companies whose dealings in their own stock dominate
>the market, especially in the options markets.
>
>By the way, this shrinkage in publically traded stock is my biggest
>technical indicator for medium-term directionality of the market: up.
It's one thing when you've got lots of "free cash flow" (profits less capital expenditures) to lavish on stock buybacks; it's another thing when cash flow turns negative and you're issuing junk bonds to fund the buybacks. Of course we're not talking about Microsoft here, which has oodles of cash and no debt.
Doug