Share Buybacks (4)

Free float

If a company has to resort to improving their share price by reducing free float, it is usually not successful –

a simple glance at the past 2 years' price performance of most of these companies will tell you that.

By reducing free float, it is a futile exercise as the company will have to accumulate a significant amount to prop up the share price –

that seems artificial no matter how you look at it as the only group really keen to own the shares is the company themselves.

Of course, share buybacks can successfully engineer higher share prices by massively reducing free float but they will have to meet regulations for minimum free float in the market place.