Share Buybacks (6)

Make their intention known

It is safe to say that companies should make their intention known to the public when doing sharebuybacks –

is it for future placements to institutions;

to be canceled, if so please state a time frame;

not to be canceled, but to be sold back into the market when price is higher;

or to be disbursed as bonus.

To me, that is vital information and I believe investors will rate the stock accordingly with the new information.

Bottom line, if it is not going to be canceled, share buybacks are not really that big a positive in rating the company.

Most times, companies who do share buybacks will not see significant improvements in their share price –

investors do not rate a company higher because of that as investors are not buying the stock in the first place for various other reasons, and the freefloat is not really a major reason.