actually that is not what WB says at all, but nice try
If a company has a market cap of A$50BLN, and cash in the bank of A$25Bln (hypothetical example here), and the company generates good growth and returns on capital invested - it is only operating at 50% of potential. IF there are no feasible acquisitions or expansion needs requiring those funds, then the Return on Equity will be more favourable if the cash is used to buy back shares. Dilution is reduced and the assets of the company all go towards a positive ROE.
Is quite simple, but people seem to not understand it well.
CLSA - downgrade to A$4.20 TP, page-44
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