We’ve all seen it happen, right? The corporation buys back their own stock in order to increase its own share of profits. That makes perfect sense, right? I mean, it’s not like they’re selling it to themselves anymore. They’re simply buying it back.
The number of corporations that have made stock buybacks is pretty small.
This has happened to the United States twice. In the first one, a company bought back 2.2 billion shares of its own stock. The second one, a company bought back 1.5 billion shares of its own. While these were both positive steps in corporate transparency, they were both also very expensive. And that is why you should get in the habit of buying back your own shares.
There is another reason why corporations should buy back their own stock, and that is they would be buying their own stock back from the stock markets. The corporations that have done this are selling the stock at a lower price than where it was sold originally, making them less susceptible to a stock market selloff. This is important because it will make the stocks of the smaller companies less attractive in the future.
The big reason to buy back your own stock is because you may be a shareholder in your own company. When you own the company, you don’t own it; you just own the right to own it. When you buy back your stock, you own it (along with all the other shareholders) and you can sell it back to the company for a profit when you want to.
It is important to buy your own stock back to use it as a “hedge” in case the smaller companies go out of business or you decide they arent worth buying back. You can also use it to buy back your own shares so you can be sure you own it too.
This is not a new idea. I have written about it before and you can read more about it on our blog.
Another option is to buy back your own company stock. It comes with a lot of advantages. You always own it and it is liquid and easy to sell. You can use it to buy cheap, lower price stock that you can sell to the company for a profit. You can also buy back your own shares so that you can be sure you own it too.