Thursday, February 24, 2011

Sears (NASDAQ:SHLD) Share Buybacks Hurting Company Market Value?

Sears (NASDAQ:SHLD) is a mess, but in his annual letter to shareholders today, Chairman Eddie Lampert compared the company with Apple.

Toward the bottom of the rambling, 21-page letter, which includes concessions of “missteps,” Lampert launches into a discussion of Apple and Microsoft (NASDAQ:MSFT): how one (Microsoft) buys back stock and the other (Apple) doesn’t. (Sears is the poster child for share repurchases.)

As a result of share buybacks, he says, Microsoft’s market cap lags Apple's (NASDAQ:AAPL).

“The point is that the attention some have placed on overall market value rather than per share value is misplaced from the vantage point of an investor in a company, “he says. “Sheer size may make for interesting headlines, but it may distract from doing the optimal things for shareholders of a business.”





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