Intel Corp (INTC)

[fastpathguru]

We've touched on it indirectly. Today's low interest rates are a strong incentive to borrow to buyback shares. The interest can be less that the dividend which is saved, and the interest is a tax writeoff. All things being equal, the EPS goes up by way of fewer shares plus the benefit of the tax writeoff. It effectively turns the dividend payout into a tax deduction, at least for the shares bought back. Intel did this last quarter. I think they should do it more.

<facepalm>

What can you buy with your extra EPS?

(Better spend it quickly, before it's bled back out via employee options!)

Oh wait, you can't. (But boy does it suck to be stuck paying the taxes on those earnings! LOL! Also, note that according to your "shareholder ownership"-based theory of "double taxation", Intel just took YOUR earnings, wrote them off, and GAVE them to a bunch of OTHER now-ex-shareholders... DOUBLE LOL!)

If you're going to actually realize some of those buyback-related gains (by selling your shares, terminating that potential income stream), better do it before your like-minded peers do! You need to be near the head of the line of sellers...

Oh, and don't forget to pay your income taxes on those gains! (If you're "lucky" you won't hit that 35% tax bracket.)

And if perchance some earnings are redirected from dividend payouts into buybacks, rejoice in the extra volatility that comes from losing some of the incentive to hold on to shares...

fpg