>>12702811 pb
Buybacks - gets into murky and dark cnrs of the market makers, the big put shorters and big call insider trading types. All of them cheats who immediately suspect a buyback is a fog device covering some achilles heel or crisis in confidence moves by the CEO and top 10 Shareholders of a company.
Yes, using company profits to decrease debt (by cancelling shares off the exchange aka the creditor) you improve the asset side of a company and should improve shareholder confidence because the earnings dividend per share is improved - the slices of the profit cake and 'goodwill value' get a bit larger. PE ratio looks good and the small holder like you and me think the board are legends looking after our interests. On paper. But in the sharks tanks of Wall Street they 100pc sell that news. They would short IBM as well and start a run, a cascade, because they sense the board are not 100pc all out killers going for the throat of some competitor or other. Kill or be killed is all they know.
So two models we see. The coke-sniffing-shark-tank-all-out-assault-jock-CEO using every dime of debt they can muster, because "Hey, the big banks have every confidence in me - otherwise why would they give me revolving credit?" .....or the stable longterm comfy-suit-comfy-shoes-classic-values-are-everything CEO.
eg, Henry Ford hated the market and avoided it. He stashed cash like a narc cartel and when his horseless carriage competitors were hit senseless by the October 1929 sell off he did not run out and buy them as bargains. Maybe he could have to acquire the IP of such things as fuel injectors etc, but his cars were not for Cord/Duesenberg/Stutz customers at all. He kept with KISS. Now eventually Ford went into the luxury car segment, yes, but the numbers in that segment were higher by the 1950s.