During the period of 1/01/2015 through 9/30/2018, Exxon Mobil, per its SEC-published Statement of Cash Flows in its financial reports (10K and 10Q), expended approximately $6.193 billion of owners' cash to acquire common shares from the market.
As of 1/01/2015, Exxon had 4.201 billion shares outstanding; and as of 9/30/2018, there were 4.233 billion shares outstanding. The result: continuing shareholders gave up more than six billion dollars in the most recent period, ostensibly in exchange for $6 billion worth of share reduction; however, at the close of September 2018, there were 32 million more shares outstanding than when the cash-blowing operation began.
More than $6 billion of owners' cash was expended for the shares bought and therefore may not be argued as having been needed by the company. Shareholders might reasonably ask why the alternative of an additional $6 billion in cash dividends were not paid? That is, for continuing shareholders of Exxon-Mobil in late 2018, what benefits accrued to them in lieu of having received the $6 billion as additional cash dividends? It certainly wasn't a reduction of shares outstanding.
For Exxon-Mobil management having traded away more than $6 billion of continuing shareholders' cash in exchange for no reduction of common shares outstanding, such an action is financially indefensible.
DISCLOSURE: The author has no financial interest, short or long, in the company discussed.
As of 1/01/2015, Exxon had 4.201 billion shares outstanding; and as of 9/30/2018, there were 4.233 billion shares outstanding. The result: continuing shareholders gave up more than six billion dollars in the most recent period, ostensibly in exchange for $6 billion worth of share reduction; however, at the close of September 2018, there were 32 million more shares outstanding than when the cash-blowing operation began.
More than $6 billion of owners' cash was expended for the shares bought and therefore may not be argued as having been needed by the company. Shareholders might reasonably ask why the alternative of an additional $6 billion in cash dividends were not paid? That is, for continuing shareholders of Exxon-Mobil in late 2018, what benefits accrued to them in lieu of having received the $6 billion as additional cash dividends? It certainly wasn't a reduction of shares outstanding.
For Exxon-Mobil management having traded away more than $6 billion of continuing shareholders' cash in exchange for no reduction of common shares outstanding, such an action is financially indefensible.
DISCLOSURE: The author has no financial interest, short or long, in the company discussed.
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