How Companies Use Buyback Announcements To Attract Speculators
In theory, buybacks are a signal that a corporate insiders, the people in the best position to job a company’s true worth, think that the stock price is currently undervalued. It’s a theory with problems (like the role of executive compensation), but you can understand why buybacks can move the market. Utpal Bhattacharya from Hong Kong University of Science and Technology and Stacey Jacobson of Southern Methodist University School of Business have a slightly different question.
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