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That would dilute the share price when it's high and boost it when it's low. Reaching some kind of equilibrium in the middle... What would be the point of that
by jannes 8y ago
That would dilute the share price when it's high and boost it when it's low. Reaching some kind of equilibrium in the middle...
What would be the point of that? A stock buyback is not an investment, but rather a transfer of wealth that's not taxed very much.
- adrr 8y agoFor a company, it would be obtaining capital cheaply on a per share basis. Most of these companies have huge debt. Take for example, Amgen which is spending $10 billion to buy back shares. They have over 31 billion in debt or which is $10 billion is short term.