Probably the company is cash rich. Not having any immediate expansion program Instead of paying high dividend they resort to buy back
it could for any number of reasons
shares are sold originally to gather capital to get the business going, and each shareholder owns a part of the company, some people will buy a big block of shares and if these people are also members of the board of directors the amount they have may determine their power in the company
however, these shares are not those the company usually buys back
they simply are reducing the number of investors in the company by buying back the shares outstanding
A stock repurchase is a way of returning cash to shareholders (as dividends are - but capital gains are taxed in the US at a lower rate - another advantage to shareholders). Sometimes a company will decide to repurchase stock because they are flush with cash and have no available projects that would return the cost of equity. Another advantage is that it increases the stock price, and gives the company a way to restructure their capital structure without taking on more debt.
They are flush with cash and have confidence that the value of the company will grow.
One of of the big Apple investors have been pushing to buy back shares, you can read about his reasoning:
http://www.reuters.com/article/2014/10/0...
they just bought back some $17 billion a couple days ago.
It means the company feels its stock is undervalued and is willing to put its money where its mouth is and invest in their own stock.
Good for investors, also shows confidence in their business.
it means we are paying to much for our crestor colesterol lowering meds .
greed .
cool
I saw in the news that Pfizer is buying back $11billion in shares over time. But what does it mean in general when companies buy back shares, what is going on with that?
