Potash, with their earnings release today, still continues to believe that they can gouge farmers with excessively high prices for fertilizer. They've drunk their own kool-aid, as they bought back over 15 million shares of stock at an average price of over 183, and just finished picking up almost 5 million shares in the latest quarter at $175; $100 over the current price of the stock.
Potash will eventually be the poster child of arrogant and out of touch management, who burned through shareholder money in a commodity business, by buying back stock at 10X the price it was just a few years back, throwing money away in stock buybacks, and auction rate securities that have lost 2/3 of their value. And they knowingly did this in a worldwide recession and in a worldwide credit crunch. But then, they had one of Wall Street's "best" advising them!
But then again, they had the cheering of analysts. But they had no cheering here!
http://aaronandmoses.blogspot.com/2008/08/potash-story.html
Look for estimates to come down.
Here's the press release on today earning's:
During the three months ended September 30, 2008, the company repurchased for cancellation 4,964,500 common shares under the program, at a cost of $870.7 and an average price per share of $175.38. The repurchase resulted in a reduction of share capital of $23.3, and the excess of cost over the average book value of the shares of $847.4 has been recorded as a reduction of retained earnings. During the nine months ended September 30, 2008, a total of 15,820,000 shares were repurchased at a cost of $2,902.9 and an average price per share of $183.50, resulting in a reduction of share capital of $73.8 and a reduction in retained earnings of $2,829.1.
http://biz.yahoo.com/cnw/081023/potashcorp_q3_results.html?.v=1
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