zim integrated shipping services stock buybacks, also called share repurchases, are when companies buy back their own stock. Instead of paying dividends, firms reduce the number of shares.
**Why companies do buybacks**
– Make financial ratios look stronger.
– Signal confidence in the business.
– Support stock prices during weakness.
**Examples**
– Apple: one of the largest buyback programs in history.
– ExxonMobil: uses buybacks when oil profits are high.
– Enhance EPS growth.
**Benefits for investors**
– Can drive share prices higher.
– Boosts investor trust.
– In some countries more efficient.
**Risks of buybacks**
– Poor capital allocation.
– May limit growth opportunities.
– Artificial support can mask weaknesses.
**Conclusion**
Stock buybacks are both beneficial and risky. When done wisely, as by Apple or Microsoft, they boost value and reward investors. But careless repurchases waste capital.
