Why perform a buyback?
- Buybacks can make a stock more attractive to investors by increasing the company’s EPS.
- Buybacks also increase the concentration of a company's ownership among existing shareholders.
- They can also signal that the company is confident in their future growth prospects (otherwise the company wouldn’t be buying their own shares).
- In the absence of compelling growth opportunities or debt reduction, share buybacks can be an attractive and easy option for companies with surplus cash.
However, there’s more to the story:
Companies know that some investors look at share buybacks as a sign that a stock is undervalued.
This means they can sometimes be used as a tool to manipulate public perception – rather than a clear sign of future growth prospects.
Companies may buy back shares for a variety of reasons, not just because they believe their stock is undervalued. They might be trying to:
- Boost EPS to meet internal financial targets.
- Artificially boost the price of their stock, without delivering improved value.
- Offset the dilutive effects of stock-based compensation (this is where employees and executives receive shares or stock options as part of their compensation).
Also worth noting: as markets have become increasingly flooded with liquidity (from governments pumping cash into the system in the wake of the GFC), the volume of buybacks has increased substantially.
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Last
$7.16 |
Change
0.020(0.28%) |
Mkt cap ! $5.990B |
Open | High | Low | Value | Volume |
$7.10 | $7.16 | $6.84 | $72.74M | 10.29M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 3922 | $7.12 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$7.16 | 2173 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 50 | 7.100 |
2 | 6000 | 7.070 |
3 | 8726 | 7.000 |
1 | 7960 | 6.980 |
2 | 4000 | 6.950 |
Price($) | Vol. | No. |
---|---|---|
7.170 | 650 | 1 |
7.180 | 200 | 1 |
7.190 | 3002 | 1 |
7.200 | 1559 | 2 |
7.240 | 2000 | 1 |
Last trade - 16.10pm 04/10/2024 (20 minute delay) ? |
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