Comment by nyeah

10 hours ago

That's only true if the company pays book value for the shares.

I'm upvoting because you're advancing the discussion for sure.

You're right, I missed that! But, essentially this makes the case for buybacks even worse - paying over book value for shares means that the company is reducing its book value via the buyback. So, it's worth less after the buyback.

  • Yes. Book value is just one metric for value, but let's keep using it. I could also say that paying less than book value is increasing the book value, so the company is worth more after the buyback. As you say, it depends on the purchase price.