Stock Buybacks Explained

The benefits, drawbacks, and controversies...

👋🏼 everyone,

In recent weeks, Goldman Sachs said it expects U.S. share buybacks to exceed $1 trillion for the first time in 2025, driven by strong earnings growth from technology companies and looser financial conditions as the Federal Reserve looks to cut interest rates.

But what implications does this have for the average person? Should we be cautious about companies repurchasing their stock? And how does this affect the stocks that investors own in these companies?

Buybacks are certainly not without controversy. This tweet from Bernie Sanders discussing the Chevron buyback last year, is an opinion held by many.

With that in mind, let's explore the positive, negative and controversial aspects of stock buybacks!

Today I’ll cover:

• Stock buybacks - quickly explained 📜

• The Upsides 😀

• The Downsides 🧐 

• 📹 A simple buyback case study using Amazon’s $10 billion buyback

• A list of companies buying back shares in 2024 👀