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It doesn't matter that they are buying at a higher price, theoretically stock buybacks should have no affect on the market value of the company. All it does is
by smabie 7y ago
It doesn't matter that they are buying at a higher price, theoretically stock buybacks should have no affect on the market value of the company. All it does is increase shareholder equity and buy the same amount decrease the number of floating shares. The problem is that retail money only looks at the price of the stock without any context for the company as a whole.
- somethoughts 7y agoThere is a very real issue if the company pays too high a price for its share buybacks. Taken in the extreme case of the corona virus there is a very real difference if the company (say the airlines) did a buyback of a set amount of shares in January 2020 versus if the company did a buyback of the exact amount of shares buyback today, post corona virus crash.