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Then go buy based on buyback promises.
They will love you for it.
All, and I repeat ALL things being equal the latter's share price would be about 1/2 of the former'sStock prices reflect value of the company based on revenues, EBITA, potential for growth
NOT the availability of the stock itself.
Take 2 identical companies.
One with 1,000,000,000 shares outstanding, the other with 2,000,000,000 shares outstanding.
Same revenues, same EBITDA, same potential for growth.
Which one should have the higher stock price? Why?
All, and I repeat ALL things being equal the latter's share price would be about 1/2 of the former's
But
How much does each have in free capital
What about long and short term debt?
Companies that promise shar buybacks RARELy fulfill the promise.
When they do buy it is on the drop which is intended to prop up share price.
As I said.
You buy based on share buybacks and I'll buy based on value.
No, not mistaken.All, and I repeat ALL things being equal the latter's share price would be about 1/2 of the former's
So, when you claimed......
Stock prices reflect value of the company.....NOT the availability of the stock itself.
You were mistaken?
But
How much does each have in free capital
What about long and short term debt?
Exactly the same.
When they do buy it is on the drop which is intended to prop up share price.
Buying 100,000 shares at $20 is better than buying 50,000 shares at $40, right?
As I said.
You buy based on share buybacks and I'll buy based on value.
Where did I say I buy based on buybacks? Link?
No, not mistaken.
Small change.
Both companies have EXACTLY the same number of outstanding shares.
Let's say 100m shares.
And with no their impacts company a buys 1M shares of its stock.
What would that do to the stock price?
Increased buying means lower availability because of increased demand.
With increased demand (true demand or stock buyback) comes higher price for the stock of A.
BUT
This increase in price is not due to any financial condition within A.
MEANWHILE
B takes that same capital and invests to make products better and reduce operating costs.
B's stock price will increase as well but the increase will be due to operating efficiencies and product improvement.
You buy A, I'll buy B.
While buybacks may be important to a companies financial stability, a company's fundamentals and historical track record are far more important to long-term investors. When selecting stocks I ignore stock splits, stock dividends, and buyback. It changes nothing fundamentally. While a buyback will temporarily increase prices and will reduce outstanding shares. Sales, Earnings, and future prospects of the company remain the same. Although the reduction in outstanding shares will increase earning per share, the amount usually is pretty small and it is shown as an adjustment to earning in financial reports so year to year comparisons are not effected.Buybacks artificially inflate the stock prince.
A small advantage for the stockholder but potentially a large return for management whose income may be based on stock price.
More importantly, as an investor, why would a company feel the need to artificially inflate stock process.
Generally stock price will reflect revenues, EBITA, and expected growth.
When a company goes on a buyback I see it as a warning of future issues.
And with that you demonstrate both your lack of knowledge and your MAGAT intent....
And then the Biden administration criminalizes their "better" version.
No, not mistaken.
Small change.
Both companies have EXACTLY the same number of outstanding shares.
Let's say 100m shares.
And with no their impacts company a buys 1M shares of its stock.
What would that do to the stock price?
Increased buying means lower availability because of increased demand.
With increased demand (true demand or stock buyback) comes higher price for the stock of A.
BUT
This increase in price is not due to any financial condition within A.
MEANWHILE
B takes that same capital and invests to make products better and reduce operating costs.
B's stock price will increase as well but the increase will be due to operating efficiencies and product improvement.
You buy A, I'll buy B.
No need.No, not mistaken.
You were lying?
And with no their impacts company a buys 1M shares of its stock.
Can you try that in English?
No need.
You've been handed your ass.
Live with it.
No . How am I gaining in that transaction ? Think about it for a moment.
My heart sinks when compamies I invest in do this.I rarely see the benefit in real terms..
Any reduction in the share capital has negligable effect on the share price or the dividend and it seems to be the act of a management that has run out of ideas.
I would prefer the cash and a new board of directors.
Do buybacks work for you ?
hbr.org
Why Stock Buybacks Are Dangerous for the Economy
Even as the United States continues to experience its longest economic expansion since World War II, concern is growing that soaring corporate debt will make the economy susceptible to a contraction that could get out of control. The root cause of this concern is the trillions of dollars that...
Making matters worse, the proportion of buybacks funded by corporate bonds reached as high as 30% in both 2016 and 2017, according to JPMorgan Chase. The International Monetary Fund’s Global Financial Stability Report, issued in October, highlights “debt-funded payouts” as a form of financial risk-taking by U.S. companies that “can considerably weaken a firm’s credit quality.”
