What is Share Buybacks?
Share buybacks (repurchases) are when companies use cash to buy back their own stock, reducing share count and (mechanically) increasing EPS. US companies have spent over $1 trillion annually on buybacks in recent years. Apple, Alphabet, Meta, and Microsoft are among the largest repurchasers. India and Japan also see growing buyback activity, though typically smaller scale.
Why it matters for investors
Buybacks return cash to shareholders (more tax-efficient than dividends in many jurisdictions), signal management confidence, and support stock prices. Critics argue they prioritize short-term EPS over long-term reinvestment. The 1% US buyback excise tax (2023+) has had only modest dampening effect.