Share buybacks have become the rage for companies with large amounts of excess profits or free cash flow. Wall Street analysts love share buybacks as a way to “return capital to shareholders,” and many boards of directors give a lot of weight to what the analysts who follow their companies say.
My opinion is that in many cases, share buybacks turn into throwing away the money.
Let’s start with that “return capital to shareholders” misrepresentation…
The post Why You Can’t Trust Share Buybacks originally appeared at Investors Alley.