[txrefugee]

Corporations are spending billions buying back their stocks. Many highly successful businesses will never issue stocks. So it appears the corporate world is dumping the stock market, too. The disasters us market crash in 2008 taught many people a valuable lesson about investing one’s money in this shaky entity. It is a gamble.

[bert]

Stock buy backs are an effort to increase share value and the price to earnings ratio.

Since dividends are taxable, the use of earnings to buy back shares provides value to shareholders that would be taxed if paid out in dividends

So, you are wrong. Share buy back strengthens the company and the market

[nathanbedford]

If a corporation is issuing stock that could mean one of several things, the Corporation needs money which it cannot borrow from a bank or other sources, the Corporation can get better terms from the market then it can get from conventional lending institutions, it believes that it can put the money it acquires to profitable use by expanding its business, it believes it can pay off conventional debt more cheaply and it is worth watering down shareholders equity to do it, it believes the price of the stock will fall and it is an opportune time to capitalize by issuing stock. By extension it could mean the Company believes that the entire market will go bear-ish and now is the time to load up on cash to see itself through hard times.

Normally the opposite considerations apply to companies buying back its own stock. Often this means that a company believes that it can increase shareholder value more by reducing the shares outstanding then it can accomplish by devoting the money to expanding the business. It usually means that the company believes that the value of the stock will go up and might also mean that the company believes that the whole market will go up.