Companies should treat shareholders fairly and buybacks don't

It can be hard to see where the money goes and who it benefits in share buybacks. (Image: Depositphotos)

Mon, 05 Sep 2022

Just as there are different methods of raising capital, some ways of returning capital to shareholders are more equal than others.When a company decides to return capital, it’s essentially saying it can’t see any better investment opportunity.By far the most common method used by NZX-listed companies is a company buying back its own shares on market and cancelling them.We’ve just seen a flurry of these announced including Spark’s $350 million buyback and A2 Milk’s $150m. In theory, such buybacks raise the wort...

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