Stock Buybacks: Four Reasons

Stock buybacks have reached their highest level since the financial crisis, with S&P 500 companies repurchasing $166.3 billion of shares in first quarter of 2016. The Investor Responsibility Research Center Institute (IRRCi) and Tapestry Networks have scheduled a webinar for Tuesday, September 13, 2016, at 1 PM ET to review the findings and respond to questions. As large American public corporations repurchase company shares at historic rates, corporate directors cite four key reasons for buybacks: to return capital to shareholders; invest in the company’s shares; offset dilution from using equity as currency; and/or alter the company’s capital structure. The directors generally disagree with widespread criticism of corporate stock buybacks, and say that companies need to better disclose the reasons for undertaking buybacks.

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