If your stock has dropped by almost half this year, and your profits just dropped by 37 percent in the most recent quarter, you probably have three options for dealing with this situation.
A. Sell the company and go sit on a beach.
B. Buy another company with your piles of cash and make your earnings so complicated for years to come that no knows how well you’re really doing.
C. Buy back a mind boggling amount of stock.
According to an 8-K filed on Wednesday, Network Appliance, the Sunnyvale digital storage company, has selected option C. The company said it would buy back $1 billion worth of stock, in addition to the $200 million authorization it still has left.
Now, let’s do some math. The company’s stock closed Wednesday at $24.16 per share, giving it a market cap of $8.78 billion. That would essentially allow the company to buy back about 13.7 percent of its stock.