Comment by kristianp
5 hours ago
It's not exactly the same: if the company does buybacks and then loses value or goes bankrupt, shareholders never get the benefit of those buybacks.
5 hours ago
It's not exactly the same: if the company does buybacks and then loses value or goes bankrupt, shareholders never get the benefit of those buybacks.
Shareholder prefer buybacks for tax reasons.
He didn't say it was exactly same, only that in principle it's the same - company returning money to shareholders.
Such an action has no effect on company valuation.
depends how sophisticated the investor in the story is. it thay are perfect homo economicus they would have been selling some of those inflated shares to do what they would have done with the dividends