When Seagate Technology (STX) reported earnings back on July 30th, it confirmed that the company had completed a massive buyback of 45M shares for $1.25B. The puzzling part is that the company spent over $27 a share for a stock that traded below $10 for a few days back last October. Why load up now?
The company is a worldwide leader in hard disk drives and storage solutions.
Seagate actually ended the quarter with sequentially higher cash showing that the buyback was at least from cash generated from operations. A good example that the stock was trading considerably below the ability to generate cash if the company bought back 10% of the outstanding stock in one quarter alone.
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