Free
Message: Just food for thought

I read today that Amgen was BORROWING money to buy back their own shares. What makes this interesting is that this borrowing has caused their debt load to increase to the point where the credit rating agencies have downgraded their rating and they still feel it is worth it. They do remain investment grade. Seems risky, but the article points out that it provides a very strong signal in their confidence in the business to the market and obviously takes shares out of circulation. Edig probably is not in a position to borrow now, but even if they had to pay 15% for the money--15% of 0.03 is less than 1/2 cent. Wouldn't it seem that the combined show of confidence and reduction in outstanding shares would make the stock go up much more than that and on some level "get the word out"? Tell me I'm crazy.

Share
New Message
Please login to post a reply