Cisco earnings wildly overstated: management milks shareholders for fun and profit « Ultimi Barbarorum
In effect, share buybacks resulting from option issuance destroy value, not boost it as Prof. Lazonick implies. Take the example of IBM, which he says spent $73bn on stock repurchase from 2000 to 2008, half the current and then-market cap (it happens to be the same, about $155bn). They have net debt of about $13bn according to Wolfram Alpha. During that period, despite having bought back half the market cap in money, the shares in issue have only fallen by about 23%. Not a highly efficient buyback from any perspective, unless you