The company's stock has dropped 41% this past year. Could this possibly be a prelude to the selling of the company or a bankruptcy reorganization?
2007-11-09 01:54:15 · 6 answers · asked by kenneth_henry2003 1 in Business & Finance ➔ Corporations
No.
If the company was getting ready to file for Bankruptcy, the CEO would not be buying.
Perhaps you mean that the corporation is buying back shares. IBM does this also when the stock is down.
To me it might be an indicator that the stock has bottomed out.
2007-11-09 05:46:10 · answer #1 · answered by Feeling Mutual 7 · 1⤊ 0⤋
If i was a CEO and i was buying up shares. I might have inside info that i was about to be bought out by a bigger corporation in the near future at a premium share price that is higher than my stocks are currently trading thus making a profit on my initial investment. If this wasn't the case the possibility might be that i have fudged the books and am trying to cover my tracks by making the company look strong by all the active trading being done.
2007-11-09 02:06:03 · answer #2 · answered by Mark S 2 · 0⤊ 0⤋
It typically is a last step to demonstrate that there is light at the end of the tunnel....that the CEO is willing to invest is a means to try and show confidence to stockholders and to keep his job. Check out the recent history of MEC - Magna Entertainment Corp. - and how the Stronach family is doing the same thing for what has become an absolute failing company within facets of the Thoroughbred industry.
2007-11-09 02:00:37 · answer #3 · answered by Zombie Birdhouse 7 · 0⤊ 0⤋
Maybe he wants to buy low and resell them later at a higher price when the company gets stronger.
It's also bad to have low priced stock out on the open market. Looks bad for the company.
2007-11-09 01:58:10 · answer #4 · answered by Sarasvah 5 · 0⤊ 0⤋
Sometimes because they are confident the price will increase. And sometimes because they want to APPEAR confident that the price will increase.
2007-11-09 01:59:21 · answer #5 · answered by npk 7 · 0⤊ 0⤋
To take it private?
2007-11-09 02:25:12 · answer #6 · answered by Anonymous · 0⤊ 0⤋