Do Buybacks Destroy Shareholder Value? [ANALYSIS]

There is nothing that divides the investment community more than share buybacks.

However, despite the wealth of information, and studies on the benefits/drawbacks of repurchases, a solid universal conclusion has remained elusive.

Opposition to buybacks

In the UK, buybacks are generally considered a waste of shareholder funds. British investors prefer their investments to pay hefty dividends. Many reasons are citied against the use of buybacks:

• The stock market is supposed to be a long-term compounding machine. Replace dividends with buybacks and compounding takes a hit.
• As an executive with a compensation plan linked to share performance, if you buyback and bump the share price up, your...