Companies Use Borrowed Billions to Buy Back Stock, Not to Invest
Buying your own stock is like returning money to shareholders. It&#x27;s effectively a dividend, by raising the stock price by the same amount they use to buy back stock.<p>Like if they use $1 billion to buy back stock, the aggregate value of the outstanding stock should go up by $1 billion. Doesn&#x27;t matter if they borrowed the money, the company retains the value.<p>Having a high company value must have some benefits to them in other ways. Perhaps even less negative news articles in the press, and an easier time hiring good employees, just to name two.