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And analysts aren't wise to this practice? Wouldn't the market have priced in that charade already?
by shostack 11y ago
And analysts aren't wise to this practice? Wouldn't the market have priced in that charade already?
- lujim 11y agoEveryone knows it's happening, the real question is whether it is a charade or not. Buy backs are a legitimate practice for companies that want to reward shareholders and gain a bigger chunk of their own business. Nothing sketchy there. The question is why would a company like Nike want to buy back it's own stock at historically expensive valuations rather than use that money on new products or to expand their market share? Are they doing it to gain a bigger piece of their own business, or are they doing it to juice earnings because top line sales are decreasing and they need to beat earnings expectations to keep the share price up? The jury is still out.