How Long Can Home Depot And Others Masked Poor Results With Buybacks?

Here we go agian....... A warning that is masked by a huge cash infusion that is fueled with almost $ 12 billion of new debt! The rating agencies have already said that they will downgrade the rating from A to the third lowest investment grade rating. Please make sure you read this post Reviewing The Home Depot Buyback History to see what the former $13 billion buyback during the greatest housing bull market has done for the stock.....

Hier ein typisches Beispiel wie sehr momentan maue Ergebnisse mehr und mehr durch gewaltige schuldenfinanzierte Aktienrückkäufe geschönt werden. Im Falle von Home Depot sollen insgesamt 12 mrd $ neu aufgenommen werden. Die Ratingagenturen haben bereits angekündigt das Rating von A auf das drittniedrigste Investment-Grade- Rating herabzusenken. Um zu sehen wie das bisherige Aktienrückkaufprogramm von über 13 mrd $ verpufft ist, solltet ihr Euch den o.g. Link zu Gemüte führen ....

The Home Depot®, the world's largest home improvement retailer, today announced the launch of a tender offer for 250 million shares of its common stock at a price range of $39.00 to $44.00 per share. In addition, the Company updated its fiscal 2007 sales and earnings per share guidance.

On June 19, 2007, the Company announced a recapitalization plan whereby its board of directors authorized a $22.5 billion increase in its share repurchase program. It is the Company's intention to repurchase up to $22.5 billion in shares as soon as practicable. As part of its plan, the Company's board of directors authorized a self-tender offer for the purchase of up to 250 million shares of the Company's common stock. The tender price range is $39.00 to $44.00 per share
The Home Depot may purchase up to an additional 39.5 million shares in the tender offer without extending the tender offer.

..based on weaker conditions in the housing market, the Company said that it now expects its earnings per share to decline by 15-18% for fiscal 2007, with total retail sales down 1-2% and comparable store sales down mid-single digit

> This is now the third warning since February......They risk their strong financial position just when the housing market is facing a long year bear market and shares are close to 5 year highs......That sounds clever......This management could be forced to do some "bondholder" value management insteadt of their excessive shareholder management after this buyback is completed...This could also be a good entry point to open a short position :-)

> Dieses ist bereits die dritte Warnung seit Februar........HD riskiert die bisher starke finanzielle Position im Angesicht eines jahrelangen Abschwungs im Immobiliensektor.....Das Timing die Aktien gerade nahe dem 5 Jahreshoch zurückzukaufen ist ebenfalls eigentümlich....Alles in allem gut durchdacht.......Diese Aktie könnte in naher Zukunft dazu gezwungen werden sich nach den Anleihebesitzern zu richten und anstelle eines Sharholder eine Bondholder Value orientierte Politik zu betreiben.... Dann könnte ebenfalls der Punkt gekommen sein um eine Shortposition zu eröffnen :-)