How are stock buybacks any worse than dividend payouts to investors?
I get how they are logistically different, but to me, whether you give the investors cash that they use to buy more stock, or you internally increase the value of a stock by buying it back with company funds, the result is the same – Investors get richer at the cost of investment.
Not saying buybacks aren’t bad, but I guess I just don’t understand the hate relative to dividend payments.
In: 98
Stock buybacks work the same as every other investment. You need to buy low and sell high. Stock buybacks are usually done indiscriminate to price, and results in overpaying for a stock. This will only benefit shareholders that sell at a high price, and causes a loss of value for everyone else.
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