Here's how that compares with some companies that are known for
their large stock buybacks.
The three CEOs, over the span of a dozen years, followed a strategy that has become the norm for many big companies during the past two decades:
large stock buybacks to make use of cash, coupled with acquisitions to lift revenue.
That would make
it the largest stock buyback in history.
The book is a series of case studies that describes how a small number of CEOs have used cash generative businesses as platforms to drive massive returns for shareholders by directing excess cash opportunistically between
large stock buybacks, special dividends and acquisitions of other businesses.
Not exact matches
According to research by HSBC,
buybacks have been the
largest source of net demand for the
stock market since 2009.
Since 2012, when the company launched the
largest share repurchase program ever, Apple has returned a little more than $ 100 billion to shareholders in
stock buybacks and dividends.
Software giant Oracle bought back $ 4 billion worth of
stock last quarter, but Cramer thought the company's $ 70 billion pile of cash could've warranted an even
larger buyback.
We're in the process of securing a credit facility which we expect to be
larger than the
buyback authorization, to have the flexibility to pursue potential acquisition opportunities as well as buy back
stock when appropriate.
And I think the example of that, which you point out in your book, is what's happened in terms of
large corporations with
stock dividends and
buybacks.
The increase is due in
large part to Apple's increasingly aggressive
stock buyback program.
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A
large portion of
stock buybacks only sop up new shares issued by the company to employees exercising
stock options.
* Previous
buyback completion rates matter, which shows that
stocks with high completion rates but low
stock returns following previous
buybacks enjoy abnormally
large returns following a subsequent
buyback announcement.
Outerwall hasn't been liquidating itself through
buybacks — instead it has leveraged the balance sheet by issuing
large amounts of debt, using the proceeds to buy back
stock, which has reduced the share count, but not the size of the balance sheet or the amount of capital employed.
Stocks with high completion rates but low
stock returns following previous
buybacks enjoy abnormally
large returns following a subsequent
buyback announcement.