What is a share buy back? - Aussie Stock Forums

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  1. #1

    Default What is a share buy back?

    Is a buy-back when the company starts buying all their shares back and does this normally mean they are going under? As in the case of NHH

  2. #2

    Default Re: buy-back

    try the search function next time....


  3. #3

    Default Re: buy-back

    A buy-back does not necessarily mean a company is going under.

    Some see it being good for a stock's fundamentals, and some see it being bad for a stock. It's beyond me to explain the fundamentals of buy-backs though.


    Have a read at the above link.

    Last edited by It's Snake Pliskin; 25th-July-2005 at 10:59 PM. Reason: punctuation
    Discussion only! Posts may be factually incorrect due to ignorance, taken out of context, misinterpreted, or just opinionated discussion.

  4. #4

    Default Re: buy-back

    What a fascinating history this company seems to have. Do you know anything about it Andrew?

    As you'll have realised from the link that money tree posted, you can't generalise about why companies hold buybacks. In this case, the announcement says "capital management". Why not assume they mean what they say, at least untill there's evidence otherwise.


    Without music, life would be a mistake

  5. #5
    Pigs In Space GreatPig's Avatar
    Join Date
    Jul 2004

    Default Re: buy-back

    Quote Originally Posted by ghotib
    Why not assume they mean what they say
    Well, company management are effectively politicians, and we all know that politicians rarely mean what they say, and even more rarely say what they mean


  6. #6

    Default Re: buy-back

    My my aren't we cynical.

    Ackshully in this case the shares seem to be so tightly held already that the board doesn't need to worry about shareholder votes or other expressions of opinion. Does that make them more of less likely to say what they mean?
    Without music, life would be a mistake

  7. #7
    Hatchet Moderator doctorj's Avatar
    Join Date
    Jan 2005

    Default Re: buy-back

    When you invest in a company, you're doing it to in a return in excess of what you could elsewhere (ie. cash). The return in excess of that is your reward for the risk you take that they won't.

    If a company does not need its cash for working capital and cannot/won't invest its cash in a new project to generate returns for the investor, the capital should be returned to shareholders. A buyback is one way to do so.

    That's the theory anyway. I didn't read into the links posted, but the poster was correct when they said that its complicated in that there are many different reasons why a company would do a buy back.

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