Speculate in the commodities market in oil contracts and drive prices up further. That would be consistent with corporate and Wall Street behavior. After all, if they get into trouble Mighty Ben (to the Mighty Mouse theme) will save the day.
I would gladly take their money if they did not know what to do with it.
I am sure I could spend it and figure something to do with a few billion dollars.
As long as Washington meat-heads don’t change the tax treatment, the answer is: Dividends. Give some of it back to shareholders! Share buybacks only make sense if there’s a tax efficiency gain but they also lead to too much manipulation and since the cap gains & dividends rate are the same now, at 15% – dividends are preferred. Cold hard cash doesn’t lie. Its the easiest way to value a company.
I don’t know about other companies, but the miserly skin flints at Exxon could boost their paltry dividend a little. At least bring up to par w Chevron!!
This is an insulting question and the answer is obvious.
With all the hardship that Americans are facing due to the greed of Corporate America and the irresponsibility and disregard of the welfare of the American people by our government, it is obvious that this obscene excess of stolen money should be handed over to the American Middle Class.
One word – DIVIDENDS. Dividends to the people that own the company, the shareholders. Purchases of other companies, like HP’s buyout of EDS, are almost always value-destroying propositions. If I wanted to own EDS, I could buy it in my portfolio without paying a premium for it.
If companies have a pile of excess cash sitting around they should pay dividends. To me, that’s the whole reason a company exists and dividends are the basis for the value of company stock. Without a dividend company stock is worthless. To me, the basis for a capital gain on company stock is an expected increase in dividends.
I don’t think ExxonMobil will be investing in alternatives any time soon. It seems that Exxon defines itself as an oil company. Others in the oil business see themselves as energy companies. My money is on the energy companies trying to diversify the mix.
If I were a pharma company, I would be trying to make my pipeline more robust by buying start ups. I would potentially form a JV with other partners for riskier prospects.
HP’s buyout of EDS is a good sign, in that it allows HP to expand in services sector and EDS benefits by induction of fresh business ideas from HP. Plus this merger could means a new trend in services sector model, i.e, reduction in services cost and quantum improvement in quality of services.
This merger may be in contrast to MSFT & YHOO where MSFT was dishing out a lot of money just to get YHOO out of the way and YHOO could have lost the core business model i.e. internet infomation sharing for the world.
Dividends are a great way for successful companies in mature industries to reward investors, so this should probably be the first choice. Companies that are financially successful but have low stock prices (too many splits) should announce and maybe execute stock buybacks to get the stock price back well above $10 so that mutual funds can hold them. Most mergers fail, so this should not be the first choice, if even considered.