Canon released a statement on their site a couple of days ago :
"At the Board of Directors meeting held on February 15, 2007, Canon Inc. (the company) resolved to acquire its own shares under Article 156, as applied pursuant to paragraph 3, Article 165, of the Corporation Law, as follows.
...
4. Period of acquisition: From February 16, 2007 to March 16, 2007"
Anyone have any reason/thoughts/ rumours /guesswork or tea readings as to why this would occur. My thought was that a company would enter this strategy with the thought the share price was going to rise or fall and they either wanted to control it (minimise the downturn) or profit from it. Ok, I'll toe the line and say they thought the shares would rise substantially given an impending announcement.
nikt wrote:
Canon released a statement on their site a couple of days ago :
"At the Board of Directors meeting held on February 15, 2007, Canon Inc. (the company) resolved to acquire its own shares under Article 156, as applied pursuant to paragraph 3, Article 165, of the Corporation Law, as follows.
...
4. Period of acquisition: From February 16, 2007 to March 16, 2007"
Anyone have any reason/thoughts/ rumours /guesswork or tea readings as to why this would occur. My thought was that a company would enter this strategy with the thought the share price was going to rise or fall and they either wanted to control or it or profit from it. Ok, I'll toe the line and say they thought the shares would rise substantially given an impending announcement.
nikt wrote:
"At the Board of Directors meeting held on February 15, 2007, Canon Inc. (the company) resolved to acquire its own shares under Article 156, as applied pursuant to paragraph 3, Article 165, of the Corporation Law, as follows.
...
4. Period of acquisition: From February 16, 2007 to March 16, 2007"
Standard operating procedure for companies when they think their shares are undervalued or when they have some cash they want to park for a while before beginning a major investment. Nothing significant or particularly noteworthy.
You certainly don't buy back shares if you think they are going to fall. However, it doesn't mean that they think they are going to rise significantly after PMA if that's where you are going. If the board is playing on that kind of a monthly basis then Canon needs a new board. I suspect that the board sees a very bright long term future and that is what they are reacting to. Also remember that Canon is far more than cameras and I doubt that a new DSLR (or not) is going to dramatically impact the fortunes of the overall company.
nikt wrote:
Canon released a statement on their site a couple of days ago :
"At the Board of Directors meeting held on February 15, 2007, Canon Inc. (the company) resolved to acquire its own shares under Article 156, as applied pursuant to paragraph 3, Article 165, of the Corporation Law, as follows.
...
4. Period of acquisition: From February 16, 2007 to March 16, 2007"
Anyone have any reason/thoughts/ rumours /guesswork or tea readings as to why this would occur. My thought was that a company would enter this strategy with the thought the share price was going to rise or fall and they either wanted to control it (minimise the downturn) or profit from it. Ok, I'll toe the line and say they thought the shares would rise substantially given an impending announcement.
Thoughts?
Edited by nikt on Feb 17, 2007 at 11:24 PM GMT...Show more →
They believe the shares are undervalued. What's not said their is that they will only buy the shares under a certain price.
Anyone have any reason/thoughts/ rumours /guesswork or tea readings as to why this would occur. My thought was that a company would enter this strategy with the thought the share price was going to rise or fall and they either wanted to control it (minimise the downturn) or profit from it. Ok, I'll toe the line and say they thought the shares would rise substantially given an impending announcement.
Thoughts?
This has little to with shares being undervalued and everything to do with taxes.
As an investor, if a company takes the money and pays me a dividend, then that money has to be declared on my 1040 and I pay tax on it the same year as the dividend.
On the other hand, if the company takes the money and buys back shares, it should (most of the time) cause the share price to go up. Fewer shares with same net value in the company generally results in a higher share price.
The difference is how the change in value is taxed.
If the value of my shares go up, two nice things happen. First, I can control when I recognize the income by selling the shares. I might not want to have to pay tax on a dividend payment this year, but I can chose when I sell those shares.
Second, for most people, capital gains tax is generally less than the ordinary tax rate. If I'm in, say, the 28% income tax bracket, then that's the amount I pay taxes on dividends. If I've held the shares for longer than a year, I might be in the 15% capital gains tax bracket.
Assuming everything else is equal... the amount the company would have paid me as dividend is exactly equal to the increase in my share value if it buys back stock instead, there's a 13% tax advantage to me for the company to buy back stock instead of paying me a dividend plus I get to control the timing on when I pay the tax.
Failing companies may buy back shares to prop up their stock price or keep from being delisted. Successful companies usually buy back shares because it has considerable benefits for their investors.
Edited by ebanderson on Feb 18, 2007 at 07:47 PM GMT
Monito wrote:
Based on 10 am GMT, you are off by one or two hours in your times. For example London is GMT, except in summer time and this is not summer time.
You are right - I made a mistake in my calculations, especially the times for both NY and London.
I only know the time for HK and Japan. It is more accurate for Japan's time, which is 9am - everywhere else should have the news ready (or slightly later) by Tokyo's time, not sooner than that. 5am in NY, I don't think I can wake up just for that. Maybe later.
ebanderson wrote:
This has little to with shares being undervalued and everything to do with taxes.
As an investor, if a company takes the money and pays me a dividend, then that money has to be declared on my 1040 and I pay tax on it the same year as the dividend.
On the other hand, if the company takes the money and buys back shares, it should (most of the time) cause the share price to go up. Fewer shares with same net value in the company generally results in a higher share price.
The difference is how the change in value is taxed.
If the value of my shares go up, two nice things happen. First, I can control when I recognize the income by selling the shares. I might not want to have to pay tax on a dividend payment this year, but I can chose when I sell those shares.
Second, for most people, capital gains tax is generally less than the ordinary tax rate. If I'm in, say, the 28% income tax bracket, then that's the amount I pay taxes on dividends. If I've held the shares for longer than a year, I might be in the 15% capital gains tax bracket.
Assuming everything else is equal... the amount the company would have paid me as dividend is exactly equal to the increase in my share value if it buys back stock instead, there's a 13% tax advantage to me for the company to buy back stock instead of paying me a dividend plus I get to control the timing on when I pay the tax.
Failing companies may buy back shares to prop up their stock price or keep from being delisted. Successful companies usually buy back shares because it has considerable benefits for their investors.
You mistakenly attributed the question to me.
Dividend isn't a percentage of income. The only other choice wasn't to pay it out to shareholders. Smaller companies often manipulate share prices through stock sale/purchase, but Canon is too big to do that in a major way.
We do agree that the board views may their stock as a good investment. There can be balance sheet reasons too.
lordcarl wrote:
You are right - I made a mistake in my calculations, especially the times for both NY and London.
I only know the time for HK and Japan. It is more accurate for Japan's time, which is 9am - everywhere else should have the news ready (or slightly later) by Tokyo's time, not sooner than that. 5am in NY, I don't think I can wake up just for that. Maybe later.
..and then we have the international date line. Is it yesterday or tomorrow in HK?
It's a snowy Saturday morning in Chicago.
lordcarl wrote: Monito wrote:
Based on 10 am GMT, you are off by one or two hours in your times. For example London is GMT, except in summer time and this is not summer time.
You are right - I made a mistake in my calculations, especially the times for both NY and London.
I only know the time for HK and Japan. It is more accurate for Japan's time, which is 9am - everywhere else should have the news ready (or slightly later) by Tokyo's time, not sooner than that. 5am in NY, I don't think I can wake up just for that. Maybe later. [/quote
So if you are saying that the announcement is 9am on the 22nd in Tokyo, that wyould be 12 midnight on the 21st in London, anm I correct in my calculations?
And in another post you semed to say it would be 5pm on the 22nd in Tokyou.
I am getting confused!
Regards,
DaveMart wrote:
So if you are saying that the announcement is 9am on the 22nd in Tokyo, that wyould be 12 midnight on the 21st in London, anm I correct in my calculations?
And in another post you semed to say it would be 5pm on the 22nd in Tokyou.
I am getting confused!
I need my morning coffee, that's for sure. Did I say 9am? I really need my coffee then. Another confusion from me.
lordcarl wrote:
I need my morning coffee, that's for sure. Did I say 9am? I really need my coffee then. Another confusion from me.
Should be 5pm in Tokyo on the 22nd. My apology.
That's 8am London time, I think - I'd be grateful if someone else could check my calculations though, as I am kinda dyslexic about these things.
Regards,
So are we talkin' one lousy camera now? I hope it's the one I want
How about the lighter, better glass? Seriously, if it's a 40D, I'm not going to Vegas...
But I would be really surprised if they decide to keep 1Ds unchanged...
Maybe their calculations are showing them little benefit in upgrading it
comparing to the mass market stuff. But a big anniversary, big booth PMA with
one lousy 40D would be a sad joke...
If the 'Little Erwin' rumour is right, then Canon have kind of killed two birds with one stone at 12MP and FF but weatherproofed and with 1 series AF and a high fps, this is both the 1DII replacement and the rumoured 'high-end' 5D
For the low-end 5D, there is really no great rush to replace the 5D - until manufacturing progress means they can take more cost out.
In the same way, the 1DsIII replacemt can easily wait until the fall.
I don't know if what has been said about just one camera being announced on the 22nd in any way precludes another being announced later on in PMA.
I would suspect in this case it would be the 40D.
Regards,
