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Payback for AOL Shareholders

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Expect AOL to initiate a stock buyback with proceeds from its $1 billion patent sale to Microsoft.

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MINYANVILLE ORIGINAL Long-suffering AOL (AOL) stockholders are getting a little joy this week as the company begins giving them the entire $1 billion-plus it got for its patents in a sale to Microsoft (MSFT).

The checks are not in the mail. The money will be spent on a stock buyback that is intended to boost its price. According to AllThingsD.com, the patent sale proceeds could be worth roughly $11 a share.

The buyback won't be officially announced until later this week, although CEO Tim Armstrong had said the proceeds would go to shareholders. But it seems to be working already. AOL stock is up 78% on the year. Yesterday, it was down only a penny, to $27.15, on a day that the Nasdaq (^IXIC) dropped almost 2%.

The announcement also helped Armstrong defeat an activist shareholder assault from the hedge fund Starboard Value.


No positions in stocks mentioned.
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