FYI: Few topics have spawned more confusion and misinformation than share repurchases, or stock buybacks.
Many investors view buybacks as benign ways for companies to return cash to shareholders. Others see pernicious and toxic instruments of manipulation that enable top executives to enrich themselves at their workers’ and shareholders’ expense.
This debate would become a lot less polarized if both sides were to recognize that not all buybacks are created equal. A buyback signifies one thing when it is used to absorb the otherwise diluting effect of an options exercise by a company’s CEO — and especially if its timing is planned to hit the market just before that exercise.
In contrast, a buyback means quite another when the company’s board genuinely believes its stock is significantly undervalued.
Regards,
Ted
https://www.marketwatch.com/story/heres-what-you-really-need-to-know-about-stock-buybacks-2019-07-01/print
