arbee

Dell Share Buybacks: Good For Shareholders?

Buybacks are essentially stock purchases. Stock purchases make sense when the opportunity cost of making the purchase makes sense. The other uses for this money by Dell is : 1. reinvest 2. dividends 3. cash. If the stock price of Dell is below the intrinsic value of the stock. Stock repurchases make sense. In other words All other things being equal, Dell's stock repurchase makes more sense at a lower price than a higher one. Now we are seeing that Dell is at a much lower price than earlier, as for the intrinsic value I think it is higher than the price.