Don't Believe What You Read About Buybacks

Picture for a moment the Business Press Maven running a public company. For convenience sake, let's call it Lamebrain Business Media Stenographers (LBMS), and imagine we're at a public meeting. There, I announce a share buyback plan -- $800 million worth -- and look down from the dais to see business reporters, those cute little gullibles, scribbling approvingly in their notebooks. I know just what they are going to report and, as such, begin to laugh so hard that my CFO eventually has to slap me back to consciousness.

Here's what the dutiful scribes are going to report:

"Shortly before laughing convulsively, The Business Press Maven announced that his company, Lamebrain Business Media Stenographers, would buy back up to $800 million of its shares."

Now, tell me why it misinforms investors. ...