Question

How successful have share buybacks been lately

Answer 1

Share Buyback- It is the corporate action that takes place when company repurchases its shares from stock market to boost the share price. When company thinks, its share price is undervalued and not performing from last few months or years then company comes up with buyback procedure. This is a strategy of wealth maximization of shareholders.

Benefit of share buyback- Buyback increases the per share price in the market as the number of outstanding shares decrease. Shareholders get capital appreciation, they had bought the share at lower price now at higher price, they can sell and can get profit.

Latest Buybacks- Boeing, Johnson & Johnson, Universal heath service, Shoe Carnival etc. have announced buyback. In 2018, total buyback was of $800 Billion and $200 Billion was yet to be purchased. Allstate company bought back shares of $1 Billion. These are some recent examples.