Friday, June 20, 2008

I Want My Buyback Back.....Daimler Is Doubling Down Again

Wow! This adds up to a buyback of € 12 billion within 24 month..... Unfortunately my February post was spot on.... It is amazing that they still call this optimization of their capital structure. Based on todays share price their latest effort to" increase the return to shareholders" amounted in a loss of roughly € 2 billion or 30 % in just 12 month..... And all this in the face of a recession, high fuel prices hurting especially Mercedes, EADS in freefall, their truckbusiness hitting a wall, their financing unit under pressure ( margins, higher risk provision for lease vehicles , rising delinquencies etc....), their 20% Chrysler investment close to insolvency ( don´t know exactly if they are on the hook for more...UPDATE: Chrysler Taps $2 Billion Line of Credit from Daimler ), etc....... On the other hand one has to ask why the sharesholders are voting in favour for this kind of nonsense.... They deserve to pay the price. The free cashflow in Q1 was just over € 1 billion.... If this run rate continues i think that even the slow moving rating agencies will take a look at their "A" rating with a positive outlook. But with their models at work they might reward Daimler with an upgrade (as their outlook is sugesting ).....

Glückwunsch! Insgesamt summiert sich das Aktienrückkaufprogramm auf satte 12 Mrd € binnen 24 Monaten.... Damit bestätigt das was ich im Februar befürchtet habe.... Es grenzt schon an eine gewisse Arroganz den erneuten Rückkauf über 6 Mrd € immer noch als Optimierung der Kapitalstruktur zu vermarkten. Und das nachdem das letzte Rückkaufprogramm binnen 12 Monaten fast 2 Mrd € ( entspricht 30 % ) versenkt hat. Soviel Chuzpe verdient schon fast wieder Respekt...... Besonders wenn man bedenkt das die nächste Zeit besonders für Daimler alles andere als rosig aussehen wird. Eine weltweite Rezession oder zumindest ein deutlich langsameres Wachstum, hohe Spritpreise die nicht gerade die Hersteller großer Wagen bevorzugen, CO2 Diskussion, die wichtige Finanzbeteiligung EADS im freien Fall, Die 20% Beteiligung von Chrysler faktisch insolvent ( bin mir nicht sicher ob hier noch Nachforderungen drohen UPDATE: Chrysler Taps $2 Billion Line of Credit from Daimler ), das Nutzfahrzeuggeschäft bricht gerade massiv ein, die Finanzsparte als Hauptgewinntreiber kommt stark unter Druck ( Margen, Ausfälle, fallende Rückkaufswerte ), usw...... Auf der anderen Seite muß man sich schon Fragen was die Aktionäre geraucht haben um solch wahnwitzige Programme zu befürworten. Den Preis für diese Kurzsichtigkeit werden Sie wohl noch teuer bezahlen müssen...... Der free Cashflow von Daimler in Q1 betrug ca 1 Mrd €........Sollte dieses Missverhältnis noch länger anhalten dürften selbst die nicht immer cleveren Ratingageturen Ihr "A" Rating mit positiven Ausblick eher früher als später überdenken. Obwohl man bei deren Bewertungsmodellen nie genau weiß ob nicht sogar ein nicht wie Ausblick inmpliziert Daimler mit einem Upgrade belohnt wird.....

Daimler For the further optimization of Daimler’s capital structure, the Board of Management of the company decided to carry out a new share buyback program. The Supervisory Board of Daimler AG has approved this decision. In exercise of the authorization granted by the Annual Meeting of April 9, 2008, the decision of the Board of Management allows for the buyback of 10% or approximately 96.4 million of the outstanding shares for a maximum amount of EUR6 billion. In order to optimize the buyback, shares may also be acquired with the use of derivatives.

Daimler’s capital structure is to be further optimized with the goal of reducing the use of equity capital, which is more expensive than debt capital. This will avoid investment decisions being limited by excessively high capital costs. ....

The shares acquired will later be cancelled without any reduction in Daimler’s share capital. It will also be possible to use some of the shares to serve stock option plans.

The company started its first share buyback program at the end of August 2007. By March 28, 2008, 99.8 million shares had been bought back for EUR6.2 billion.


Can anyone see the impact of almost € 6 billion........`

Kann in dem Chart irgendeiner die verpulverten € 6 Mrd ausfindig machen...... ?

Share Buyback based on the Authorization of the 2007 Annual Meeting
Period
No. of Shares Acquired
Average Price (EUR)
Purchased Volume (EUR)
Total
99,768,314
62.11
6,196,752,952.16
March, 2008
27,622,866
53.62
1,481,249,244.31
February 2008
22,185,448
55.69
1,235,524,406.33
December 2007
4,384,000
69.10
302,953,032.70
November 2007
16,366,000
69.05
1,130,005,849.60
October 2007
13,445,000
74.29
998,821,360.14
September 2007
14,390,000
66.72
960,165,710.94
August 2007
1,375,000
64.02
88,033,348.15


I have to repeat myself and point to this brilliant quote from Stuart Rose via the great piece from Jeff Matthews How to Buy Back Stock: Not “Just Because We Can” .

Auch auf die Gefahr das ich mich wiederhole verweise ich auf dieses Zitat von Stuart Rose aus dem extrem lesenswerten Post von Jeff Matthews hat zu diesem How to Buy Back Stock: Not “Just Because We Can” .

"At that point in time, we still have, Doug, correct me if I'm wrong -- about 200,000 shares outstanding on the old buyback. Again, we -- like we buy our stock like we do everything else, if there's an opportunistic place to buy it. We don't just buy it arbitrarily because we can, we buy it to support what we consider basically ridiculously low levels."

AMEN!

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