Originally Posted by
Ellen
SOMETHING FISHY GOING ON . . . .
Today's Headline:
ST. GEORGE, Utah, March 8 /PRNewswire-FirstCall/ -- SkyWest, Inc. (NASDAQ: SKYW) today announced that it has been authorized by its Board of Directors to repurchase up to 5 million shares of SkyWest, Inc. outstanding common stock. The Company is authorized to repurchase in the open market or in privately negotiated transactions as deemed appropriate by management. Depending on market conditions and other factors, these purchases may be commenced or suspended from time to time without prior notice
Headline less than a year ago:
SkyWest's secondary offering of common stock, completed April 17, 2006, wherein SkyWest issued 4,000,000 shares of common stock, which increased the fully-diluted weighted average shares by 6.6%
Seems to me with all their Management Changes lately that they are looking to acquire somebody (Midwest). I would assume the stock buy back is going to be used for a CASH / STOCK deal to counter AirTran. Only makes sense.
The problem with your theory is stock buy backs consume cash. This is a way to increase (in theory) the price per share (earnings per share goes up = increased price) for the remaining shares when the buy back is completed. Unfortunately buy backs rarely return increases in stock value that equal the money invested to buy the stock. What I see is a management that has giving up on a move and is now reducing the amount of cash on hand since it is no longer needed. Too bad they don't use it to take better care of their employees.