Assuming 50% of the $163B is used for stock buybacks
, the company's shares outstanding would be reduced by 10%, the analyst points out.
While many companies will opt to increase dividend payouts, increase capital expenditures and pay down debt, some will respond by increasing stock buybacks
At first glance, it will appear that stock buybacks
create value for the company because dividing the same net income with fewer shares available in the market increases the Earnings per Share (EPS) of the stock.
Although popular for over 25 years, corporate stock buybacks
have accelerated in recent years, with billions of dollars in repurchases following the financial crisis of the late 2000s (Schwartz, 2011; Thomasson & Xydias, 2010).
companies in the value of stock buybacks
in the last quarter of 2013.
M2 EQUITYBITES-December 24, 2013--S&P 500 stock buybacks
up in 3Q13
The stock buybacks
will be carried out at prices management considers to be in the best interest of the company and its shareholders, depending on the market conditions, stock availability, financial results and other factors.
The bulk of the money has gone to overhaul its capital structure with stock buybacks
and debt reduction, the rest to alter AutoNation's future direction, with capital improvements and a spate of acquisitions.
in Los Angeles, said there are two sides to the coin when it comes to stock buybacks
AOL and Time Warner executives say purchase accounting will enable the new company, AOL Time Warner, to dispose of unproductive assets and conduct stock buybacks
About five years ago, banking companies weren't doing regular stock buybacks
or Dutch auctions, observes Frank Cicero, vice president at Keefe Bruyette & Woods, a New York investment bank that is acting as dealer manager for the Peoples Heritage auction.
have many of the same effects-they just work more insidiously, since nobody's complaining.