Greenberg Leaves San Diego, Back on CNBC

Herb Greenberg has returned to CNBC, the business/market TV news channel, and departed North County. He is now living in Connecticut. For some time, he wrote a column for the Wall Street Journal and appeared on CNBC while living in North County. Then he left both and set up a research firm, remaining in the San Diego area. This morning, he gave a biting report on some corporate accounting -- his specialty. The CNBC anchor kidded him about leaving California. While he was writing columns, he incurred the wrath of one Patrick Byrne of Overstock.com, who was fighting short sellers in his stock. After Greenberg left TV and the Journal, Byrne boasted that Greenberg and his confreres had "crawled under rocks." That was never true, and now Greenberg is back on the air.


Now what's so wrong about crawling under rocks? Journalists should find some slimy creatures along with my fellow reptiles on a hot day.

Response to post #1: Good point. We journalists often have to look under rocks for slime. Best, Don Bauder

Note: "Crawling out from under the Rock!" is the refrain of the Psycholizard theme song.

To your main point. Only confidence artists worry about public confidence and stock price. Good management looks at real sales and expense figures, and sees dips in stock price as buying opportunities.

Response to post #3: Back in the 1950s, 1960s, and 1970s, well-managed companies always said that management's job was to set up the company for long term success -- on the bottom line, but also in other areas. It was in the 1980s, the beginning of this era of greed, that companies began to focus their complete attention on running up their stock prices. Back in the 1960s, some corrupt companies, such as conglomerates buying assets with inflated stock, did everything in their power to run up their stocks. But most companies didn't. Now all but the very bluest of blue chips do. Incidentally, I believe that a company buying up its own stock is usually a way to run up its stock. Best, Don Bauder

Those who wish to buy never complain about a drop in price. When management or the board complain about price drops, they imply that they want to sell. Stock buybacks are fraud when used to cash out the board and management, especially when options are involved, and entirely noble when all in insiders want to cash out the malcontents. Usually a scam I agree.

Response to post #5: Most commonly, buybacks are employed to boost earnings per share artificially by reducing the number of shares. Most of the other reasons you mention are questionable. Best, Don Bauder

Most commonly, buybacks are employed to boost earnings per share artificially by reducing the number of shares.

Most CEO's have employment agreements that require them to meet certain earnings per share targets in order to receive their stock option awards. When the company's performance falters and the executive's options are in jeopardy, buybacks are used to boost earnings per share so the CEO can meet the target and "earn" the options. Investors should be wary of investing in companies that engage in buybacks.

Response to post #7: I agree completely. Best, Don Bauder

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