Give Rick credit: He's spun a compelling tale. How could he not? Rick's a great writer, and Marvel
Consider the dilution argument. Rick makes it sound so simple:
"The company had 114 million fully diluted shares in 2004 and 106 million in 2005, and now has less than 92 million fully diluted shares into which to divide its net profits."
That's exactly right. But remember that Marvel is borrowing money to buy back shares. The company isn't just being generous; it's using the corporate credit card to return money to you. What? That doesn't make sense to you? Yeah, me neither.
And it's not like Marvel won't be borrowing more soon. That $525 million credit facility Rick mentions is costly. Interest payments could reach as high as 13%, according to Marvel's filings with the SEC, and the bulk will likely be paid at or around the prime rate, which today sits at 8%.
Remember, too, that Marvel must absorb 100% of the production costs for new movies it produces. History shows that, under that model, Marvel must create another $1 billion box-office blockbuster to earn the piles of moola investors are expecting.
Call me crazy, but I don't see Ant-Man delivering such giant-sized returns.
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Fool contributor Tim Beyers owns more than a thousand Marvel comics. But he still won't buy shares in Marvel or any of the other stocks mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile . The Motley Fool has an ironclad disclosure policy .