Stock buybacks reduce the number of outstanding shares. This practice can drive stock prices higher.
Firms like Microsoft regularly use buybacks as part of strategy. Investors see them as positive signals.
Yet buybacks are controversial. Opponents argue that divert money from research and development. Governments in the U.S. have introduced stricter regulations.
Still, buybacks work well in mature companies. Apple, for ardent health market analysis instance, uses buybacks while still innovating.
In summary, stock buybacks are neither good nor bad by default. Investors must consider whether buybacks support sustainable growth.
