Aug 6 (Reuters) – It is hard, often thankless work being a
mature technology company.
New technology threatens existing revenues, making top-line
growth difficult. Employees demand lots of compensation for
forgoing a lottery ticket at a startup.
And investors, they wish you were still young and cute, like
Facebook or better yet Uber.
For many, notably Microsoft and IBM, the
play to make in response is something Bolko Hohaus of Lombard
Odier Investment Managers has called GOSOBB, or Giving Out Stock
Options and Buying them Back. This maneuver, which is so common
it hardly attracts notice, allows for handsome payments to staff
while unrealistically flattering earnings. Employees get their
packet and investors can still imagine that they are
participating in a young growth stock.
“Share buybacks by large tech companies in general have
actually not reduced share counts over time by the same
proportion of the market cap as they have been buying back,”
Geneva-Based Lombard Odier fund manager Eurof Uppington said by