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Don't be fooled by stock gains, they're largely a result of share buybacks(2018) (businessinsider.com)
5 points by mgh2 32 days ago | hide | past | favorite | 3 comments



So what? Share buybacks are just a tax efficient way to distribute profits.

> nor do they make grossly overvalued shares more reasonable

Yes they do, as a share buyback improves every valuation metric on a per share basis.


These takes did not age well.

Buybacks are a logical way to distribute profits back to shareholders so the attack on them was always a bit off. The biggest knock on them was probably that companies had lots of debt which made these not worth the risk - but given the interest rates and inflation all debts have been easier than ever to pay back.


If a company has no better use for its money than share buybacks, it's a company that's not worth investing in. In others words it's not an expanding company, because expansion requires capital.

On the other hand, if you're a day trader, that company is as good for gambling on as any other.




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