News
Getty announces increase to stock repurchase program
Getty Images’ Board of Directors authorized an increase in the company’s stock repurchase program from $150MM to $250MM. Such programs allow a company to buy back its own shares on the open market and is usually implemented when management considers the shares undervalued. The move can be interpreted as an indication of management confidence in the company. In Getty’s case, we might also see this as evidence that management has found no other way to invest its huge cash trove, i.e., at the present time, it sees no other stock photo companies it wants to purchase or prevent competitors from purchasing. Another effect of a company repurchasing its stock is to reduces the number of shares outstanding in the open market (those it purchases are retired) which increases the earnings per share. Some analysts have already increased their projected earnings per share for 2006 by about $0.07 to $2.82 because of this announcement. The company reports there are currently 62.4MM shares of common stock outstanding. As of this writing, the shares trade at $64.38 giving the company a market capitalization of about $4.2 billion. Click here to view the original press release.Posted in: News, Stock Photo Companies
