I think there's a bit of an agency problem on that one. Paying large dividends to return cash is sometimes a good choice for investors, but some executives, especially in tech, see it as some kind of failure: you're doing the opposite of an IPO, giving money back because you admit you don't know what to do with it! A bold new move is more interesting from an empire-building point of view.
No wonder the only winners are usually the banks and legal advisors, and sometimes senior management at the acquired company. As an INTC shareholder I am pissed about this. A 60% premium? WTF.
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How about paying dividends?
I think there's a bit of an agency problem on that one. Paying large dividends to return cash is sometimes a good choice for investors, but some executives, especially in tech, see it as some kind of failure: you're doing the opposite of an IPO, giving money back because you admit you don't know what to do with it! A bold new move is more interesting from an empire-building point of view.
No wonder the only winners are usually the banks and legal advisors, and sometimes senior management at the acquired company. As an INTC shareholder I am pissed about this. A 60% premium? WTF.
Or buying back shares.
Same thing, modulo tax treatment and accounting.
That's a big modulo though, most investors react differently to the two.