What's the point of this ?

Valeant Pharmaceuticals International, Inc. (VRX) (VRX.TO) announced today that its Board of Directors has authorized a new securities repurchase program (the "Securities Repurchase Program"). Under the Securities Repurchase Program, which will commence on November 21, 2014 , the Company may make purchases of up to US$2 billion of its senior notes, common shares and/or other securities prior to the completion of the program.

 

simple... To raise short term capital! Someone's in trouble ...Tick Tock Tick Tick not long left for the Fatman!!!!

 

Very scary, looks to me like there is no money left to barely cover wages

 

Here we go: diluting existing holders... We are fucked

With Valeant, I believe, everything has to go just right.
If interest rates rise, its debt-bloated balance sheet becomes less attractive for deals. That leaves its stock as currency, as long as it remains elevated -- and as long as it doesn't involve issuing new stock, which would dilute existing holders. At the same time, as Khmelnitsky notes in a recent report, "M&A activity seems to be heating up across the pharmaceutical sector." That could make acquisitions more expensive.

 

All of you should take a course in finance 101. You don't dilute shareholders by a stock buy back. In fact, you help shareholders. Companies buy stock because they feel the shares are undervalued and that capital would be wisely spent on shares than spend on other acquisitions or dividends.

 

Really, read the below, think its you that needs the 101!

While stock repurchases may temporarily boost diluted EPS, these actions do not create any value for shareholders.

"Repurchasing your own stock for this purpose is like taking money from your left pocket and moving it to your right pocket,"

"The cash managers are using to buy back shares could have been put to better use. If there is no upside to repurchases to offset this dilution, and there is a potential downside, why do it?"

Managing Diluted EPS

Understanding stock repurchases requires understanding the incentives of managers. Managers are concerned about diluted EPS for the same reasons they are concerned about reported earnings. Investors tend to reward firms that report consistent earnings growth, meet analysts' earnings forecasts, and avoid earnings disappointments. However, using cash to repurchase shares means either reducing the firms' investments or increasing its borrowing, both of which reduce future earnings.

Part of the curiosity of a company repurchasing its own shares is the fact that such behavior does not create value for shareholders, though on the surface it raises the earnings per share.

Managerial incentives may cloud the company's larger goals.

"Though some managers just want a short-term gain, we ideally want managers to care about the long term," "If managers want to maximize long-term shareholder gain, there is no point wasting time and money to buy back shares in an effort to manage employee stock option dilution."

 

Well explained, this company is NOT in a good place at all despite all the valeant trolls here pointing the opposite out. The scam has reached its endpoint

 

With Valeant its all about the short term..

 

If you go back and look at Valeant's press releases about stock repurchase over the past 5 years or so, you will see that this is something the board authorizes every year, with an expiration of the authorization set for one year later. There was one year the announcement came out in January, but typically it looks like they do this every November. Just because they authorize the stock repurchase program, does not mean they actually exercise all or part of the option. It is just the possibility for them to do it over the course of the upcoming year. It looks like it was just a coincidence of timing that this 2014 announcement came on the heels of their spectacular failure in the hostile takeover attempt of Allergan. One thing that is different is that the past authorizations were for up to $1.5-billion, and this one has been increased to $2-billion.

 

It would be a hard justification to buy when the stock is at it's all time hog hiring an all time high for the market. Nt typically when a company would do share repurchase no matter how bullish or arrogant they were. Also last time they didn't buy anything.

 

VRX is on a strong upswing. As organic growth improves our multiple should improve also

 

There is NO organic growth Troll

 

Organic growth???? What kids of 'organic weed' are you smoking?!!!

 

Well said.

Those comments were ignorant even by CP standards.