why companies don't buy back?

[commiebat]

Quote from kashirin:

wait till shares 1$ and start buying back on the open market when you have 50% shares take company private

where is the problem?

The problem is whatever pushed your shares to $1 in the first place. Which probably won't leave you with a few billion dollars lying around to make a going-private bid on your own company.

Even if it did, basically giving that money away to take your company private would exacerbate whatever actual problem you already had.

 

[piezoe]

Quote from ByLoSellHi:

OP - Great point. If you're the CEO and Board of Directors of a high quality company that has been indiscriminately pummeled, back up the truck and load up as fast as you can right now.

In fact that does sometimes happen. For example when UCBH was under attack by short sellers this past summer the CEO and other company officers started buying like mad, as did their Chinese partner bank. The stock is now up 190% from its late June low. (Was up 230% prior to this months "little" crash).

 

[Nofear777]

Quote from kashirin:

let's see - for example bear sterns cost $150
and shorts start selling it

if you company is OK and you don't have other problems than short selling

wait till shares 1$ and start buying back on the open market when you have 50% shares take company private

where is the problem?


short sellers are not guilty. even naked short sellers are not guilty - if company fails - there is a reason for that

Why? Because theyre worthless. Thats why. Going after the shortsellers is just a witch hunt.

 

[Nofear777]

Quote from oraclewizard77:

Lets assume that a company has 100 million shares outstanding. Say 70% are owned by insiders and institutions.

So we now have a 30 million float that is owned by the public.

Legal shorting occurs when brokers loan out shares that are not in cash accounts for the shorts to make a directional bet that the company is going to go down. So far so good, no problem.

Naked shorting means that the hedge funds don't have to verify that the shares are owned by anyone. So for example they can short say 200 million shares even though the entire float of the company is just 100 million shares.

So even if the company tries to buy back shares, it is not even buying back real shares. This is what is wrong and why it is illegal but until now not enforced.

The uptick rule would also be helpful since it would slow down shorting during a panic in the market.

So explain why FRE and FNM went from 20 dollars to 20 cents when there was a ban in effect for naked shortselling that covered them?

 

[Nofear777]

Quote from hoodooman:

On CNN just now, McCain was trying to blame the melt down on short selling. He also described naked short selling incorrectly. This is probably because he wasn't reading it off a page. Hope they catch him on that.

Mcain is clueless as Obama. He was telling everyone how good it was right before the BSC scenario.

This is the future? Obama? Mcain?

We are FUUUCKD!!!

 

[oraclewizard77]

Finally, a very good question. A ban on naked short selling is NOT designed to protect BAD companies from going out of business. It is to protect good companies with real assets from going out of business.

Why did FRE and FNM go to 20 cents from $ 20?

It is because as Buffet noted they were making risky loans and being reckless, which is why he said he did not invest in them.

Buffet also stated that the companies had a negative balance sheet in that they had more debt than assets, which means the companies were basically worthless.

Finally, the government took them over and as part of the agreement, they basically caused the companies to go chapter 11 in that the government took all assets and left nothing for the shareholders by force which also caused the preferred shares to be worthless but the bonds look like they are going to be ok.

Let's look instead at OSTK which is naked shorted vs EBAY which is not. OSTK is up over 16% today while Ebay is only up 4%. With the new rules, shorts are starting to cover.

OSTK is owned 31% by insiders and 71% by tutes, so how can there be such a high short % and how come it always stays on the naked short list?

Quote from Nofear777:

So explain why FRE and FNM went from 20 dollars to 20 cents when there was a ban in effect for naked shortselling that covered them?