Evaporation of Shareholder CapitalWith a share buyback program when the price of the shares goes down you REALLY have not received a returned of capital as a shareholder, you have added value to the atmosphere because the capital has evaporated in smoke.
If you buy an asset you still have an asset/production, you still have value, and it will improve your future cashflow, and the value of the corporation. The investment remains on the balance sheet. You get the benifits of your orgainizational efficiency, scale, growth, otherwise you have the accountant group running the company. As the intrinsic value of the organization increases you get other business benifits.
Share buybacks rob the shareholders of meaningful returns, and evaporate share capital because they do them at the top of the market.
With 7-8% cost of capital, to get a return now costs you to hold ARX shares associated with big time risk, if they do not provide the shareholders a lower risk opportunity, with meaningful share appreciation.
They will go elsewhere.
IMHO