Quote:
Originally Posted by Icky Thump
Buyback. You give someone money, they give you their equity in your company back.
Dividend. You pay someone for them to maintain their equity in your company
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Sure. So? With buy-backs, the people who take the offer opt to take the money and are no longer shareholders. The company no longer has the money, and the remaining shares are worth more individually because there are fewer of them.
When a company is growing, public offerings expand the number of shareholders. If a company doesn't have good prospects, why not decrease the number of shareholders? It beats having the company waste the money on initiatives that management doesn't think will have a good return.
