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Buybacks don't create value. They return the value created by the company to stockholders. They are form of dividends you're just automatically reinvesting it i
by bluecalm 7y ago
Buybacks don't create value. They return the value created by the company to stockholders. They are form of dividends you're just automatically reinvesting it into the company stock instead of getting cash.
- JimboOmega 7y agoYeah, wanted to respond this way. Buybacks are basically a one off dividend. Companies want to return money to shareholders, but don't want to commit to returning a certain amount regularly, so they do buybacks. Whether the stock is over or undervalued is a bit besides the point, actually. It's a direct flow of cash to investors, that any investor can take advantage if they think the current price is too high (or not, if the price is too low)