Both REITs are disposing of assets to raise capital to
fund stock buyback programs.
However, a credit tightening scenario can easily disrupt the current growth model and buoyant asset prices (wider credit spreads would make debt -
funded stock buybacks uneconomic).
Oh, and they are also
funding a stock buyback program from their cash on hand, which adds another percentage point or three to the annual returns that investors experience.
Not exact matches
We own a number of these carriers in our
funds: Delta Air Lines (which announced a $ 5 - billion
stock buyback program in May), Alaska Air, and JetBlue in the Holmes Macro Trends
Fund (MEGAX); Ryanair (which just hit a new 52 - week high) and Aegean Greece in the Emerging Europe
Fund (EUROX).
That meant cheap debt financing for companies that could be used to
fund growth projects and
buyback shares of
stock.
A
stock buyback is basically a secondary offering in reverse — instead of selling new shares of
stock to the public to put more cash on the corporate balance sheet, a cash - rich company expends some of its own
funds on buying shares of
stock from the public.
Using Tronc's own company
funds for the selective «
stock buyback,» rather than his own money, he first removed that lawsuit threat that still hung over his head; Oaktree agreed, as part of this sale, to drop its potential claims.
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Stocks Share
Buybacks: The Good, The Bad, And The Ugly
The simple answer in my opinion is lack of alternatives, especially for long - term investors such as endowment and pension
funds, which has created a surge in demand for
stocks at the same time that the supply of
stocks is dwindling due to the aggressive
buyback programs instituted by corporations in recent years.
Finally, U.S. equities have benefited from a record amount of share
buybacks representing over six times more
stock purchased than ETF and mutual
fund inflows, according to Bloomberg.
Most of the people here are talking about buying an index
fund or
funds, so there's no real way that
stock buybacks by individual companies are going to be a very useful indicator of much of anything in that context.
The Santa Monica - based REIT sold the Northgate Mall in Durham, N.C. and the Cascade Mall in Burlington, Wash., for a total of $ 170 million recently and used the proceeds primarily to
fund a
buyback of common
stock, according to a statement from the company.