Symantec announces US$2 billion stock buyback

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Symantec announces US$2 billion stock buyback

Anti-virus giant Symantec has announced it intends to buy back US$2 billion in stock, building on the repurchase of nearly US$7 billion in stock in the past two years.

The company said today that the program will begin immediately.

Symantec also disclosed today that it has completed a US$1 billion repurchase program began in January by buying back 54 million shares at an average price of US$18.51.

As of 11:58 a.m. today, Symantec’s stock was trading at US$19.52 a share.

Yunsun Wee, Symantec spokeswoman, told SCMagazine.com that the buyback programs intended "basically for shareholder value."

John Pescatore, vice president and Gartner fellow, told SCMagazine.com that Symantec’s board likely announced by buyback to increase the stock price.

"Companies do this for a number of reasons. I think for Symantec, it’s for the typical reason big companies do this," he said.

"If they think their stock hasn’t gone up as much as it should, they’ll do this to drive the price up."

Mike Rothman, president and principal analyst at Security Incite, told SCMagazine.com that the buybacks do not indicate a change in direction at Symantec.

"I wouldn’t read into the buyback as anything more than trying to pacify some large investors that want to see Symantec’s cash hoard being put to use. A buyback reduces the number of shares outstanding, so they can be used in option grinds and improve the earnings per share results," he said via email.

"I think this is more about financial or stock issues than anything related to the business."
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