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Re: Here's how end this thing folks
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Originally Posted by Tyrone Slothrop
I don't understand the suggestion that buybacks add less value than paying a dividend. Neither adds any value. If a company has $50 million for either, it can either distribute $50 million to its owners in cash, or it can spend $50 to buy some of the owners out. The stock is worth more in the latter case because there's less of it, and the remaining owners each own more of the company. That's not creating value, but neither is paying a dividend.
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When the amount of gain per share to an investor in market value after the buyback is less than what could have been paid with the same money as a dividend. I understand that studies show this mostly to be the case with stock buybacks. i.e. not a suggestion.
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Boogers!
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