Monday, July 31, 2006


Is Heidelberg's Share Buyback Bad News? ... and other stuff....

Look, I understand that companies do stock buybacks, sometimes when their stock is cheap and they're trying to save it (after the stock market crash of 1987, for example). I also know that sometimes companies throw off so much cash they don't know what to do with it (Microsoft comes to mind). As a shareholder, I like buybacks... until you really think about it. Comapnies are supposed to be invested in because they are able to create more value than buying than rather passive financial instruments like bonds or money funds.

But why is Heidelberg doing a share buyback? They just bought back $190 million ($150 million euros) of their stock. Does this mean that they have no clue where they could use $150 million to improve their operations with smart investment and throw of more earnings in the long run? Is this a company out of ideas about how to invest in their graphic arts businesses? How about investing in Asia, where markets are growing more than Old Europe and North America? This is a very strange decision, and it implies that their operations either are running so well and have all the capital investment they need, and more, and they can't find a single reason to invest in them any more. Are just admitting that it's time to just be milking the operations and grabbing the cash while the getting is good? Gosh, for $150 million they could have bought a supplier that has a cool idea they could use in their business. They could hire more people and expand their operations. They could give workers bonuses. They could fund employee pension plans. There are many choices for them to use this money. The fact that their first choice for investment was not their own operation may be very telling. And they may not even realize that.

People who have digital video recorders... use more print! Shocking! Well, not really. People who have DVRs have higher incomes, so most everything flows from that. Why higher incomes? More college graduates in the household. This is not as big a deal demographically as they are making it, but it's still a reminder that cutting edge media users have very diverse media habits within their homes. Oh... I checked the Print Council's site (, and not and there's no mention of this very positive print story.

The Espresso Book Machine: on demand paperback books in bookstores.... I remember distinctly being at a meeting at a major printer discussing this concept in 1995/1996ish and a hush went over the room.... because they were already trying to do it and wondered how I might have found out about it... but it's a no-brainer concept. As usual, getting no-brainer concepts to actually work is a whole different matter. (Oh, I checked the... bah! what good is even mentioning it any more?)

It's always nice to see when a revitalized printing plant does well... (Nah, I won't say a word)

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