/biz/ - Business & Finance

>>30052191


>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.

>By reducing share count, buybacks increase the stock’s potential upside for shareholders who want to remain owners. If the company is worth $1 billion, but is split fewer ways, each share is worth more.

>They’re a more tax-efficient way to return the earnings of the business to shareholders, relative to dividends, which are taxable to those who receive them.

>Via repurchases, the company’s management shows confidence in the business and supports the stock price.