Yahoo (YHOO) just announced a $3 billion stock buyback program.
“On June 24, 2010, the Yahoo! Board of Directors approved a new stock repurchase program. Under the program, Yahoo! is authorised to repurchase up to $3 billion of its outstanding shares of common stock from time to time over the next three years. The repurchases may take place in the open market or in privately negotiated transactions, including derivative transactions, and may be made under a Rule 10b5-1 plan.”
We can’t help wonder if this is the best use of Yahoo’s cash. It doesn’t want Twitter? Foursquare? Demand Media? Newsweek?
Fred Wilson, who sat on TheStreet.com’s board during a phase when it bought a lot of its own stock, offered this take on what stock buybacks signal to shareholders:
With our stock buyback we were signaling to the market that we had no good ideas about how to spend that cash. We were signaling that we didn’t see much of a future in our business. And smart investors bet against those kinds of companies, managements, and boards.
Maybe this is what Yahoo the media company will look like.