There's only one reason for a share buyback: the executive team thinks the share price is going to drop in the future so they can buy shares more cheaply than today.
We're seeing more and more share buybacks announced because company's know that the next 3-5 years will see lower share prices across the board.
I'm not long or short, but I may buy if the markets go low enough.
Interest rates are low now and inflation is around the corner if we keep printing dollars. Anyways interest on loans is tax deductible so in a way by buying back shares with a loan AMGEN is saving on taxes....
Wait...Amgen just borrowed half the debt to bailout Greece to buy back $5billion in stocks. What is wrong with this picture. How much is Kevin going to dig the debt hole to make his year end EPS goals so that he can get his $25 million bonus. When does the board think the shares will pass $65 for this buyback to make sense. In 2022??? Good luck longs. Hope you can wait!
"the executive team thinks the share price is going to drop in the future". the most brilliant statement yet.
the buyback is to be from 54-60 starting tomorrow and ending 12/7. it will take on debt to get this deal done, which means they feel the shares will INCREASE. Dangerous proposition, it did work for BIIB. I have no position yet, will be getting long on a pullback for a trade
Studies have shown that shareholders overwhelmingly prefer that spare cash be distributed instead of spent buying back stock. The argument has always been that the money should be invested in a way that grows the company, but Amgen has had a long history of making acquisitions that proved to be of little or no benefit to the shareholders. By paying a periodic dividend, the shareholders would then be able to make their own decision as to whether to re-invest it in Amgen stock or use it for some other purpose. Most companies that buy back their own stock usually do so at prices that ultimately prove to be way too high.