The people saying "it's simple math" are talking about the effect of buyback alone considering no other operations.My very basic understanding of it is that they buy their own shares back and retire them. Less shares in the market should theoretically lead to a higher share price, that is if the stock is in demand.
Just like a stock worth $100 today that pays a $10 dividend tonight should be worth $90 tomorrow - the location of the $10 changed, that's all.
If there are 100 shares of a company outstanding, and the company is worth $100,000 then each share is $1000. If the company valuation is partially because of $10,000 in cash in the company accounts, they could buy back 10 shares of stock, and now the company has distributed $10,000, is worth $90,000, and has 90 shares outstanding (or has 100, 10 of which are "inside" the company). Each share is worth $1,000.
Statistics: Posted by bombcar — Tue Apr 15, 2025 6:50 am — Replies 19 — Views 1403