1)Buybacks can shake out the short term investors.
2)It can also signal that the company thinks its own stock is cheap.
3)It "has no effect assuming the market is perfectly efficient".
And these reasons are repeated ad nauseum. I could see this be a thing if a hostile takeover is on the horizon, but poison puts are common when issuing debt, so no hostile takeovers have happened in a while. Basically I see a buyback as a way to take cheap money accessible by a company for investment, and the company uses it to finance shareholders to get a return elsewhere because the company isn't creative anymore. (Companies hit hard walls regarding physics when they keep r&d over their few cash cows over and over, and r&d is too risky to go to an area that they don't already have internal proficiencies).
1)Buybacks can shake out the short term investors. 2)It can also signal that the company thinks its own stock is cheap. 3)It "has no effect assuming the market is perfectly efficient".
And these reasons are repeated ad nauseum. I could see this be a thing if a hostile takeover is on the horizon, but poison puts are common when issuing debt, so no hostile takeovers have happened in a while. Basically I see a buyback as a way to take cheap money accessible by a company for investment, and the company uses it to finance shareholders to get a return elsewhere because the company isn't creative anymore. (Companies hit hard walls regarding physics when they keep r&d over their few cash cows over and over, and r&d is too risky to go to an area that they don't already have internal proficiencies).