Skip to content

Stock Buybacks: A Mountain or a Molehill?

February 2022

Stock Buybacks: A Mountain or a Molehill? – There has been a lot said and written about stock buybacks (share repurchases) in recent times, especially after the record-breaking numbers that it put up in 2018. The people who support stock buybacks claim that it ensures the company uses its capital prudently and effectively. However, the opponents of stock buybacks claim that it is another example of short-term thinking by corporations.

Table of Contents

Stock Buybacks: A Mountain or a Molehill?

Nevertheless, the figures don’t lie, and a record $807 billion was spent on stock buybacks in 2018, which was an increase of nearly 56% from the previous year. It captured the imagination of everyone, including investors, political figures, and the media. However, not everyone reported on it favorably, and even though it worked out for some investors, others lost money due to stock buyback programs.

So, the question is are stock buybacks a blessing or a curse for the economy? On the one hand, they help a company drive its share value and ensure that they reward its investors. However, it also means that the company has fewer funds to invest in newer products and hiring employees. How does a company achieve growth if it is spending most of its revenue on stock buybacks? There is no simple answer to that question because each company has different prerogatives and goals to achieve.

Making Sense of Stock Buybacks for Companies

The one thing that most people agree upon is that stock buybacks are not a big issue for companies who have the funds to spend on repurchasing their shares. The problem only arises when a company borrows funds from financial institutions and then uses them on stock buyback programs. The critics of stock buybacks claim that this short-term thinking by corporations will hurt the economy, as there will be less focus placed on launching new products in the market.

Are Stock Buybacks Good for the Economy?

Stock Buybacks Good or Bad? They definitely have a ripple effect on the economy, which will slowly stagnate as corporations accumulate debt to finance their stock repurchases. There is no denying that buybacks could be a major threat to the economy. Still, stock buyback supporters claim that the problem is being inflated by political figures painting an apocalyptic picture to gain support.

There is still debate surrounding the real value of stock buybacks, and whether the supporters or critics are right remains to be seen. Currently, investors and corporations are reaping the benefits of stock buybacks, and the recent trend is set to continue well into the 21st century. What the future holds for stock buybacks is anyone’s guess right now.


About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions:

LEGAL Insider Trading / Inside Trades (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks / Share Repurchases by Public Corporations (ie. Apple, Tesla, Netflix, Meta [aka Facebook], Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at .

Buy Back Analytics, LLC

Send Us A Message


27751 Fairway Hill
Franklin, Michigan 48025

Request Information

Set Up Your BuyBack Analytics Account Today!

We will keep you informed of the announcements corporations make related to their share repurchase plans, and our dashboard will inform you of all insider activity for all the stocks listed on the major U.S. exchanges. Set up your account today.