A: When companies are buying back their own stock, it's supposed to be good news. Too bad that companies, like investors, tend to buy high.
Investors often push share prices up when a company announces a buyback or an increase in the number of shares it plans to buy.
Stock buybacks are supposed to be good news for two reasons. After a buyback, a company has fewer shares outstanding than it would have had without the buyback. That means the company is cut into fewer slices, so investors theoretically get a bigger claim to the company's earnings. Some investors see buybacks as a positive because they signal the company sees its shares as being overvalued.
But companies have had a terrible track record when it comes to buying back their shares.
Companies spent a record
Let's hope history doesn't repeat.
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