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Yes.... they have a small market cap because they are returning cash to shareholders. That is literally the idea of a buyback - to shrink the market cap.
by xadhominemx 7y ago
Yes.... they have a small market cap because they are returning cash to shareholders. That is literally the idea of a buyback - to shrink the market cap.
- david-gpu 7y agoWouldn't a stock buyback reduce the number of outstanding shares, but keep market capitalization roughly constant? The company has less cash, but it has bought an asset of equal value with it (the shares).
- postingawayonhn 7y agoCompanies aren't allowed to hold shares in themselves. Once the shares are purchased the company cancels them.