Who Are the Buyers Driving The Current Market?

Companies can deploy their cash in various ways. One option is to invest in growth opportunities such as research and development, acquisition activity, and general capital expenditures. Another is to return the cash to shareholders via a dividend payment or stock buyback. In the post-crisis economic environment, which has offered fits of uncertainty, companies have increasingly chosen to return their cash to shareholders in lieu of investing in riskier growth-related activities.

Nasdaq’s new white paper explores stock buybacks, often referred to as share repurchases, one of the methods for companies to return capital to shareholders. It includes an explanation of stock buyback programs, their benefits to shareholders, recent market trends for companies executing buybacks, and the implication for investors.

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