Corporate Stock REPURCHASE [Buy-Back] Programs

By Staff Reporters

***

***

A stock buyback is when a public company uses cash to buy shares of its own stock on the open market. A company may do this to return money to shareholders that it doesn’t need to fund operations and other investments

Share buybacks can create value for investors in a few ways: Repurchases return cash to shareholders who want to exit the investment. With a buyback, the company can increase earnings per share, all else equal. The same earnings pie cut into fewer slices is worth a greater share of the earnings.

A stock buyback typically means that the price of the remaining outstanding shares increases. This is simple supply-and-demand economics: there are fewer outstanding shares, but the value of the company has not changed, therefore each share is worth more, so the price goes up.

CITE: https://www.r2library.com/Resource/Title/082610254

But, the practice has faced criticism from labor unions, the SEC, and even President Biden, who proposed stricter stock buyback regulations for company execs last week.

Nevertheless,

  • Stock buybacks from S&P 500 companies are expected to pass $1 trillion this year, after hitting a record $882 billion in 2021, according to Goldman Sachs.
  • In recent years, Starbucks spent $13.5 billion repurchasing shares.

***

COMMENTS APPRECIATED

Thank You

Subscribe to the Medical Executive-Post

***

***

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: