Inflation depreciates idle money. I'm in a privileged position to be able to save almost 65% of our net household income, as I placed it on safer investments. The key for us was not spending beyond our means. If you invest and have other sources of income outside of dividends then you will be able to live off dividends. Got north of $520K in my portfolio as I bought a lot of dividend stocks before, I'm buying more now, and I will buy more when it drops further.
The main problem is that most folks don’t care about anything other than football, Basketball and Music etc. They find it normal to take credit card debt which will cost them 20% per year but considers it risky to invest their money and make 10% or more per month. Learning to avoid high interest debt while also learning how to put your money to work for you by investing is a very powerful combo.
Starting out with a professional that knows the ropes of the choppy but profitable market is the best way to achieve getting a well structured portfolio. That’s why I have been working with 'MARGARET ANN WARNKEN" because in financial dealings one has to be prudent. Most traders enter and exit with a quick 10% profit which is not bad in general opinion but why not make more of the opportunities presented?.
She looks the part. MARGARET really seems to know her stuff. Out of curiosity i looked her up, found her web~page, and decided to read through her resume, educational background, qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I booked a session with her.
pelumi obasa by buying back shares, the company’s amount of issued shares decreases while the earnings stay unaffected. This increase the amount of earnings there is per share hence increasing the company’s P/E ratio.
OK so now we know how the buybacks work. Next can you explain why a company would do it? You kind of said it was to keep the price up, but why would they care? They already got their money at the IPO. Unless they know something and are planning some insider trading. So what the point of a buyback?
Dale Eltoft They didn't necessarily get all their money. The execs and board members are also shareholders, so the higher the share price goes, the greater their wealth on paper. They can then borrow against that wealth, as can the company, using the shares as collateral.
I have 1 big question, lets say company announces buy back and they have 10 million outstanding share. They are thinking of buying back 100k shares. Who will get chance to sell that premium price out of 10 millions? What happens after buy back at premium and you still have those shares?
So what happens to the bought shares and who is the owner ? Are the shares bought up and cancelled out, which may , maybe decrease the market cap since number of shares multiplied by price of one share is market cap. The downside is, what is there's no demand for the shares irrespective of buyback or not. And what is promoter buyback ?
They have a few options. They can decide to reissue the shares in the open market at a later date, retire the shares, or offer employment as part of a compensation/bonus program. I find the action to be shady. Some companies like he mentioned borrow money to execute this procedure.
Say a business plans to pay dividends In perpetuity wouldn’t it be obvious for the company to buy back shares not as a way to prop up the stock price but as a way to save money in the future?
He is misleading you.. its short , all right. . But extremely far from precise. I admit , he said a few thing that were true , but most of them were wrong if not a lie .And more important is what he didn't say , either because he didn't know or left it out by design. UA-cam in the worst place to come and think you learn about how financial instruments work.. 1 word true , 99 false or lie or misleading. So , in the end , i would go as far as to say that this is disinformation .
How does a company benefit from higher stock price? After they create their initial shares and sell them to the exchanges, isn’t every transaction after that among those of us who trade?? Not sure I get how this helps them become a more profitable business.
So the company will pay me my money(partly) to buy my share??? Can anyone please explain?? Coz I already own that money which the company will pay me??
Poolplayler999, Your reasons make sense but like a 2 year old I need to ask why. #1 needs no further explanation, but #2 & #3 lead me to wonder why does the company care? Investors obviously care about EPS and thus that will affect demand but unless the company is selling stock (and here we know it is buying) what does it matter? If a stock is undervalued why would the company want to signal? Seems to me that the better move would be to play the market by buying the stock to resell when the price goes up. Why are companies so concerned about their stock price and what motives do they have for manipulating/affecting it?
if the company feels their stock is undervalued they repurchase shares sometimes with excess cash generated by the company or by financing the repurchase through debt to gain leverage, to send a positive signal to the investors. the repurchase can increase EPS for a shareholder. the shareholders instead of getting cash as dividends that is taxed get greater income where essentially the tax burden is minimised..now coming to the point why a company would undertake buyback.. they do so to create a price floor. it's one effective way to take advantage of decreased market value to repurchase shares by timing it. this is generally done when management feels the shares are undervalued.
Stocks that belong to companies not paying dividends despite being profitable or currently in a loss but promising future profits and dividends can be seen as resembling Ponzi schemes. The application of the discounted cash flow model, though justified by academic jargon, can be considered a means of legitimizing this Ponzi-like structure. Hypothetical assumptions, until realized, hold no tangible value, and relying solely on such assumptions does not substantiate any claims.
share buybacks can be a very good way to return capital to long-term investors. A lot of misconception "out there" regarding share buybacks. It's not all about raising share price - it increases earnings per share and dividends per share for all future.
Wow is this guy ignorant. If a dividend stock is significantly undervalued, buying back shares can increase the dividend yield, even without a net increase in earnings. Also, in some markets, there is not always a smart investment out there for the company to make; pooring money into growth, when growth is too expensive is not a good idea. Sometimes the best investment for a company is the companies stock.
You can disagree with someone without calling them ignorant. It's called "different opinions". It is healthy for people in finance to have different opinions.
@@plasticusclinic , the problem is that this person is ignoring the fact of ownership. It is rather like he slept through accounting 101. If a company has 100 shares of stock, then each share represents 1% of the company. If it buys back 50 shares of the stock, then the people who sell the shares get cash, and each of the remaining 50 shares now represents 2% of the company. The analogy to handbags is not accurate.
@@andydavis3075 , It could be done in a manipulative way, or it could be done unwisely, but it is not inherently manipulative. The maker of the video ignores the fact that each share of stock represents ownership in the company. If a company buys back the stock, then each remaining share is more valuable because it represents a larger portion of ownership.
This explanation is a little wrong. They 're not just hoping that after buying some of the stock back , the rest will create more demand. No. There's no HOPE involved here . But what is involved here is inside trading. Letting certain ppl know when yjou're doing it and how much you'll dump on the market. Then those ppl go to their ppl , tell them to buy , because they know the mother company will BUY BACK those shares as a higher price , and voila.. Bob is ur uncle , and you don't have to hope shit. You only think you know , but in reality you have no idea how murky are these waters...
We need more videos like this, Paddy Hirsch freaking rocks!
Inflation depreciates idle money. I'm in a privileged position to be able to save almost 65% of our net household income, as I placed it on safer investments. The key for us was not spending beyond our means. If you invest and have other sources of income outside of dividends then you will be able to live off dividends. Got north of $520K in my portfolio as I bought a lot of dividend stocks before, I'm buying more now, and I will buy more when it drops further.
The main problem is that most folks don’t care about anything other than football, Basketball and Music etc. They find it normal to take credit card debt which will cost them 20% per year but considers it risky to invest their money and make 10% or more per month. Learning to avoid high interest debt while also learning how to put your money to work for you by investing is a very powerful combo.
The one effective technique I'm confident nobody admits to using, is staying in touch with an Investment-Adviser.
Starting out with a professional that knows the ropes of the choppy but profitable market is the best way to achieve getting a well structured portfolio. That’s why I have been working with 'MARGARET ANN WARNKEN" because in financial dealings one has to be prudent. Most traders enter and exit with a quick 10% profit which is not bad in general opinion but why not make more of the opportunities presented?.
She looks the part. MARGARET really seems to know her stuff. Out of curiosity i looked her up, found her web~page, and decided to read through her resume, educational background, qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I booked a session with her.
@@theresagarcia1218People need to lose for there to gain.
Eat the Sheep 🐑
Buybacks seem to be becoming a trend.
Thanks for the breakdown.
Wow so far I watch 4 videos and this explain all . Thank you 👍🏼
Very, very clear and short, keep it like this
Quick and Concise
You forgot to mention buy-backs are also done to game the P/E ratio.
Tek Sight how would a company do that
pelumi obasa by buying back shares, the company’s amount of issued shares decreases while the earnings stay unaffected.
This increase the amount of earnings there is per share hence increasing the company’s P/E ratio.
@Mark Brown did you ever learn what P&E means? I am learning too.
Not just P/E. Any valuation metric really.
What is the P/E ratio?
OK so now we know how the buybacks work. Next can you explain why a company would do it? You kind of said it was to keep the price up, but why would they care? They already got their money at the IPO. Unless they know something and are planning some insider trading. So what the point of a buyback?
Dale Eltoft They didn't necessarily get all their money. The execs and board members are also shareholders, so the higher the share price goes, the greater their wealth on paper. They can then borrow against that wealth, as can the company, using the shares as collateral.
some execs get bonuses based on stock price
@@marketplaceAPM How about stock compensation
Amazing explanatory power, Why not make selling stock options
My man explained this in less than two minutes while others take over ten. Noice.
True! Thanks for the positivity dude!
And people are sitting in jail for shoplifting
Blue Collar Crime doesn’t pay.
White Collar is where it’s at 💅
thanks, very informative, i didnt know what buybacks were before
Excellent explanation
I love these so much
Thanks, you made it very simple to understand
Superb. Thank you
I have 1 big question, lets say company announces buy back and they have 10 million outstanding share. They are thinking of buying back 100k shares. Who will get chance to sell that premium price out of 10 millions? What happens after buy back at premium and you still have those shares?
So what happens to the bought shares and who is the owner ? Are the shares bought up and cancelled out, which may , maybe decrease the market cap since number of shares multiplied by price of one share is market cap. The downside is, what is there's no demand for the shares irrespective of buyback or not. And what is promoter buyback ?
Some really good points
@@Keshini.D Thanks for the compliment. Now answer it
They have a few options. They can decide to reissue the shares in the open market at a later date, retire the shares, or offer employment as part of a compensation/bonus program. I find the action to be shady. Some companies like he mentioned borrow money to execute this procedure.
Just a way to increase shareholders’ profits at the expense of reinvesting in R&D, workers’ wages, etc. Greed personified.
🤑
Say a business plans to pay dividends In perpetuity wouldn’t it be obvious for the company to buy back shares not as a way to prop up the stock price but as a way to save money in the future?
Thank you.. now I understand.
oh, so this is what apple is doing... now i know :)
They recently bought back $110b of their shares this month in 2024.
Great break down enjoy the video. 👍🏿
short and precise :) thanks!
He is misleading you.. its short , all right. . But extremely far from precise. I admit , he said a few thing that were true , but most of them were wrong if not a lie .And more important is what he didn't say , either because he didn't know or left it out by design. UA-cam in the worst place to come and think you learn about how financial instruments work.. 1 word true , 99 false or lie or misleading. So , in the end , i would go as far as to say that this is disinformation .
Great video mate, can debt recapitalization refer to buying back stocks??
What is the execution date for these common stock repurchases…trade date?
Well done!
Thanks a lot!
How does a company benefit from higher stock price? After they create their initial shares and sell them to the exchanges, isn’t every transaction after that among those of us who trade?? Not sure I get how this helps them become a more profitable business.
Better access to debt and equity financing
Wow, can't believe this is still allowed. In my country this is restricted.
So the company will pay me my money(partly) to buy my share???
Can anyone please explain?? Coz I already own that money which the company will pay me??
A CEO makes most of his/her money by selling stocks.
the end was unexpected!
Can a company buyback it's shares in the dark pool?
This is what amc stock needs to do
Poolplayler999, Your reasons make sense but like a 2 year old I need to ask why. #1 needs no further explanation, but #2 & #3 lead me to wonder why does the company care? Investors obviously care about EPS and thus that will affect demand but unless the company is selling stock (and here we know it is buying) what does it matter? If a stock is undervalued why would the company want to signal? Seems to me that the better move would be to play the market by buying the stock to resell when the price goes up. Why are companies so concerned about their stock price and what motives do they have for manipulating/affecting it?
if the company feels their stock is undervalued they repurchase shares sometimes with excess cash generated by the company or by financing the repurchase through debt to gain leverage, to send a positive signal to the investors. the repurchase can increase EPS for a shareholder. the shareholders instead of getting cash as dividends that is taxed get greater income where essentially the tax burden is minimised..now coming to the point why a company would undertake buyback.. they do so to create a price floor. it's one effective way to take advantage of decreased market value to repurchase shares by timing it. this is generally done when management feels the shares are undervalued.
Simple. So they (the board directors) able to do right issue in the future.
A stock buyback is considered Treasury Stock to the layperson. FYI
Companies can also do stock buybacks tho.
Stocks that belong to companies not paying dividends despite being profitable or currently in a loss but promising future profits and dividends can be seen as resembling Ponzi schemes. The application of the discounted cash flow model, though justified by academic jargon, can be considered a means of legitimizing this Ponzi-like structure. Hypothetical assumptions, until realized, hold no tangible value, and relying solely on such assumptions does not substantiate any claims.
Your accent 😍
share buybacks can be a very good way to return capital to long-term investors. A lot of misconception "out there" regarding share buybacks. It's not all about raising share price - it increases earnings per share and dividends per share for all future.
I wonder how many Marker pens you must have broken up till now
Wow is this guy ignorant. If a dividend stock is significantly undervalued, buying back shares can increase the dividend yield, even without a net increase in earnings. Also, in some markets, there is not always a smart investment out there for the company to make; pooring money into growth, when growth is too expensive is not a good idea. Sometimes the best investment for a company is the companies stock.
Justin Morse but isn't that market manipulation and is a risk to investors?
Justin Morse He is wise. You are ignorant. Ponder that my myopic friend.
You can disagree with someone without calling them ignorant. It's called "different opinions". It is healthy for people in finance to have different opinions.
@@plasticusclinic , the problem is that this person is ignoring the fact of ownership. It is rather like he slept through accounting 101.
If a company has 100 shares of stock, then each share represents 1% of the company.
If it buys back 50 shares of the stock, then the people who sell the shares get cash, and each of the remaining 50 shares now represents 2% of the company.
The analogy to handbags is not accurate.
@@andydavis3075 , It could be done in a manipulative way, or it could be done unwisely, but it is not inherently manipulative.
The maker of the video ignores the fact that each share of stock represents ownership in the company. If a company buys back the stock, then each remaining share is more valuable because it represents a larger portion of ownership.
This explanation is a little wrong. They 're not just hoping that after buying some of the stock back , the rest will create more demand. No. There's no HOPE involved here . But what is involved here is inside trading. Letting certain ppl know when yjou're doing it and how much you'll dump on the market. Then those ppl go to their ppl , tell them to buy , because they know the mother company will BUY BACK those shares as a higher price , and voila.. Bob is ur uncle , and you don't have to hope shit. You only think you know , but in reality you have no idea how murky are these waters...
this made no sense........
this should be illegal
So basically they buy their own product so stocks can grow? Nice