It seems innocent enough. Wal-Mart
Cynics can argue that Wal-Mart's numbers will be bad and that this move is akin to a shopper asking for a credit line extension before a big purchase. Companies also time buyback announcements to offset unwelcome news as a show of support. But those worrywart ways don't exactly apply here. Over the holidays, Wal-Mart already announced that its December comps were trending towards the low range of its original 3% to 5% growth guidance. In other words, the market is already bracing for a lackluster showing.
Besides, the flipside to the pessimistic stance is that Wal-Mart is ramping up its buyback now because it feels that its stock is on the rise and that this is an ideal time to acquire shares at a lower price.
In fact, this is not an entirely new buyback. Over the summer, Wal-Mart announced a $5 billion repurchase program. It had only completed just over $3 billion in buybacks before announcing yesterday's plan that will replace the June program. In smorgasbord speak, Wal-Mart is going back for seconds before it's cleaned its first plate.
OK, it happens. From Gillette
So, crack open that can of worms. Conspiracy theorists, go ahead and argue that the announcement was a ploy by Wal-Mart to throw the scent elsewhere. Optimists can argue that the more ambitious buyback is a net positive, no matter how it's spun.
You? No one is forcing you to take sides. It's just a buyback. The drama is strictly optional.
So what do you think of stock buybacks? Is Wal-Mart simply in a post-holiday buying mood? How do you think the December numbers will pan out? All this and more -- in the Wal-Mart discussion board. Only on Fool.com.