*NEWS*LEXMARK BUYBACKS AT ISSUE

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*NEWS*LEXMARK BUYBACKS AT ISSUE

 user 2006-11-22 at 2:30:00 pm Views: 72
  • #17120

    Lexmark buybacks at issue
    Lexmark
    International Inc. has bought back more than 31 million shares since
    January 2005, reducing its outstanding share count to 100 million at
    the end of September.A Goldman Sachs analyst asked company executives
    during a recent conference call for their views on how the buybacks
    might be affecting stock liquidity, a measure of how easy it is to buy
    or sell a share without affecting the stock’s overall price.Liquidity
    “really has to do with the extent to which the stock gets traded in the
    market, and first of all how many shares are out there and how
    frequently they turn over,” said University of Kentucky finance
    professor Donald Mullineaux. “The concern becomes what’s called thinly
    traded stocks, which means there’s not a whole lot of buying and
    selling activity.”What happens with those thinly traded stocks is if
    large orders come in one way or the other, it tends to move the price a
    lot more.”That means prices could soar on good news or plummet on
    bad.Lexmark’s chief financial officer John Gamble Jr. told analyst
    Laura Conigliaro that “we don’t see an impact in liquidity and don’t
    believe we’re in a situation where a lower share count is currently an
    issue.”"Obviously, if it started to become one, we would have to do
    something about that,” Gamble said. “But at this point in time, we
    don’t think there’s an issue.”Lexmark officials declined further
    comment for this article, and Conigliaro was not available for comment,
    a Goldman Sachs spokeswoman said.During the conference call, Gamble
    said liquidity concerns would not prevent the company from continuing
    to buy back shares, though he did not say whether the company would
    indeed continue buybacks.The company has $600 million remaining on its
    current share repurchase authority.With that, the company could buy
    back close to 9 million more shares based on Friday’s closing price of
    $66.82