There has been a lot of coverage lately over whether stock buybacks are beneficial to investors.
First, let’s recap why companies repurchase their own shares, and then present arguments for and against the practice. Finally, we’ll list U.S. companies that are just throwing away their (and possibly, your) money.
Publicly traded companies issue additional shares to raise cash to fund projects or acquisitions, or to award employees with stock. Issuing shares dilutes the share count, which means if you hold shares, your percentage ownership of the company declines.
