Dow Jones reports that there may be a split in the management ranks at California-based Safeway Inc. over whether it should take on new debt in order to buy back the company’s stock.
The issue seems to be whether a series of stock buybacks would shore up the stock’s sagging share price, or whether it instead would only increase the company’s already considerable debt load of more than $8 billion.
These internal discussions take place in the shadow of serious competition for the company, as it has warned that first quarter profits will be well short of projections because of serious competition from Wal-Mart.
The issue seems to be whether a series of stock buybacks would shore up the stock’s sagging share price, or whether it instead would only increase the company’s already considerable debt load of more than $8 billion.
These internal discussions take place in the shadow of serious competition for the company, as it has warned that first quarter profits will be well short of projections because of serious competition from Wal-Mart.
- KC's View:
