Replies to post #424666 on Amarin Corp Plc (AMRN)

[Whalatane]

Zip

Share buybacks tend to increase the share price of a company's stock in the following ways:

They reduce the number of outstanding shares, thereby increasing the ownership stake and earnings per share for remaining shareholders. With fewer shares outstanding, the company's earnings are divided among fewer shares, boosting the earnings per share metric.

Buybacks increase demand for the company's shares, which can directly boost the share price through the basic economic principle of supply and demand. By repurchasing shares, the company is removing shares from the market, reducing supply and increasing demand.

Buybacks signal to investors that the company's management believes the stock is undervalued at current prices. This vote of confidence from insiders can drive up the share price.

Buybacks provide a tax-efficient way for companies to return capital to shareholders compared to dividends. This makes the stock more attractive to investors.

Buybacks can offset the dilutive effect of stock options issued to employees, preventing an increase in outstanding shares that would otherwise reduce earnings per share.

However, the long-term impact of buybacks on share price depends on whether the company is repurchasing shares at prices below their intrinsic value. If shares are overvalued when repurchased, buybacks can destroy shareholder value over time.
But if timed well when shares are undervalued, buybacks create value by allowing investors to have a larger stake in the company's future earnings at a discounted price.

So do U think the shares are currently undervalued ?
Kiwi

[MA52TA]

"Oh!...That might be too much work." We don't know what AD's plans are.