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That’s simply false. You’re assuming a scenario where the company does buybacks because they’re losing market share, and then implying causality. To put it sim
by __blockcipher__ 7y ago
That’s simply false. You’re assuming a scenario where the company does buybacks because they’re losing market share, and then implying causality.
To put it simply, wherher a company performs buybacks does not tell you what the future growth will be. All it tells you is that the company’s management believes shares are undervalued, or alternatively that they are irrational (to your point, I would characterize most share buybacks as irrational, but _certainly_ not apple’s)
- ethbro 7y agoIf a company habitually buys shares back, then yes, that does tell you something about future growth prospects, in comparison to share buybacks. It's a pretty clear sign of management saying "We see no better opportunity than to buy shares at the current price." This may be because management believes shares are undervalued. But it may also be because they have no alternative plans. And continued buybacks would seem to indicate the latter.