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It would increase stock price as this results in fewer stock owning larger part of the company. 10 stock for a billion valued company. It buys back 2 shares now
by xbmcuser 8y ago
It would increase stock price as this results in fewer stock owning larger part of the company. 10 stock for a billion valued company. It buys back 2 shares now the same company is owned by 8 share some of the value will come down as less cash reserves but if it is a company with growing revenue and profits the individual share price will go up.
- ThrustVectoring 8y agoThe decrease in cash reserves should exactly cancel out the decrease in outstanding shares. Buybacks still help corporate executives, though. They have stock options, and buybacks make the stock price more sensitive to profits (since the company is smaller because it has less cash on hand).