Greenlight Company Presentation

Tech Management Conventional Wisdom: No Value in Buybacks or Dividends P/E Ratio and Share Price Dell Buybacks and Valuation Metrics 90 80 70 60 50 40 30 20 10 0 Jan-95 Jan-96 Greenlight Capital, Inc. Jan-97 Jan-98 fan Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Buybacks as % of Cash -Price -P/E Ratio Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 6 Another bit of Silicon Valley lore is that there is no reward for distributing cash. Executives will routinely cite studies and examples of where buybacks destroyed value and dividends were not rewarded. The value of buybacks depends on the value of the stock. Historically, some of the most aggressive stock repurchasers have been over-valued companies with managements working to kite already high stock prices. Back when Dell's P/E ratio was in the stratosphere, much of its free cash flow went into share repurchases. Conversely, when Dell's shares have traded at reasonable values, Dell has allowed cash to pile onto its balance sheet. 6

View entire presentation