2 ms·
Except they're not. Buybacks increase the share price, that means leveraged investments (such as options) have a disproportionate increase in value.
by maerF0x0 8y ago
Except they're not. Buybacks increase the share price, that means leveraged investments (such as options) have a disproportionate increase in value.
- bb2018 8y agoSure - but is anyone complaining that companies are getting rich off options? Buybacks increase the share price and that is why board of directors prefer them over dividends (since their bonuses may be tied to them) but this is simply an aligning of preferences. If I own a company I want it's value to go up. If I could choose between my $100 stock going to $110 or my $100 going to $105 with a $5 dividend I'd choose the first since it is more tax efficient.