The slide in 2000 and 2001 isn't following the pattern. Indeed, buybacks have dried up. Last year, according to Thomson Financial, there were 792 buyback announcements, down from 1,512 in 1999. And this year is on pace for an even lower total, with only 179 announced for the year to date. And that is discouraging.
Buybacks are generally good news for shareholders, for several reasons.
First, they reduce the number of shares outstanding, which boosts earnings per share and, in theory, stock prices. And third, they provide extra buying power in the stock market in the form of the company's own cash. Alas, corporate boards seem largely uninterested in buying back their stock right now, and that is particularly true in the tech sector. In the first quarter this year, with the markets headed south, tech companies announced 37 buybacks, up just a bit from the 29 announced during the first quarter of 2000 when stocks were soaring, but down from 50 announcements in the fourth quarter. Some investors have taken solace in buyback announcement from some big-cap tech companies like IBM and Oracle.