4 Big Tech giants have plowed over $1 trillion into stock buybacks in 10 years — more than Tesla or Meta’s entire market value::Apple poured over $600 billion into buybacks in the decade to March 31, exceeding Alphabet, Microsoft, and Meta’s combined spending.
Hah! If only that were true.
It is true. If they are no longer a public company, they no longer have stockholders, and the fiduciary responsibility is gone.
What I’m trying to say is, these companies don’t use stock buybacks with the intention of going private. They’re doing stock buybacks to keep the stock price high, so they continue to please stockholders.
Stockholder pleasing is unfortunately not going away anytime soon.
Isn’t the stock price just a reflection of the market cap divided by the shares outstanding? If they buy back some stock the companies value doesn’t change. If it was about keeping the stock price high companies would never split their stock, right?
The companies value doesn’t change, but shareholders hold X number of stock, so to them their portfolio improves.
When companies split their stock, it’s to keep the price at a reasonable amount for people to buy - when 1 stock is worth $100 it makes the “minimum buy-in” very high. If the stock is split 1:10, the share price drops by 10x but all shareholders get 10x more share, so it doesn’t affect them much.
Ultimately listed companies work for shareholders’ benefit.
Isn’t buying back some stock to make the stockholders happy better than the usual playbook of sacrificing product qualify and laying people off in the name of improved margins?
Neither of those are good options.