– Share repurchases are nothing more than a cash dividend to shareholders.
– Company claims of investing in itself are bogus as long as there is one share outstanding.
– In some countries money received in share repurchases is taxed more lightly or not at all. Share repurchases on the open market also show sings of signal attempts that receive a positive response from holders.
One type of share repurchase that is not so positive for shareholders is a targeted share repurchase. This is a transaction wherein a company offers to repurchase only particular shares (usually held by potential buyers). The repurchase price is at a significant premium over the market price.
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