The Skinny on Share Buybacks

Picture the scene: You're scrolling through the latest corporate news blurbs on the Net and come across a headline announcing some kind of share buyback affecting one of your stocks. Intrigued, you double-click for more info only to be greeted with a page of leagalese that might as well be written in Sanskrit.

After a valiant attempt to decipher the code, you realize that the company is actually spelling out terms of the repurchase deal (albeit with the eloquence of Bob Dole and the clarity of a welding helmet). Included in the description are references like Dutch auction, debt ratios, and efficient capital structure, which mean about as much to most investors as a 50-page treatise on multivariate calculus.

Exasperated, you grip the arms of your chair and mutter a string of expletives. All you really want to know from these people is what effect, if any, the deal is going to have on your holdings. In other words, is this good, bad or immaterial for ME as an investor? ...