4 ms·
I do not understand why that would happen. Wouldn't they inflate the earnings per share, resulting in a permanently higher share price (all else being equal)?
by jsight 7y ago
I do not understand why that would happen. Wouldn't they inflate the earnings per share, resulting in a permanently higher share price (all else being equal)?
- dlp211 7y agoIf stock price was actually based on pure fundamental analysis, sure. That is not at all reality though.
- jsight 7y agoAfter I wrote that, it occurred to me that there is another counterargument. If cash-on-hand decreases along with the inflation of earnings-per-share, the business value doesn't really increase. I have always assumed that shareholders wouldn't take this into account, but maybe they deserve more credit than I've been giving them.