Originally Posted by
Gunfighter
Wouldn't buybacks reduce the number of outstanding shares and theoretically reduce the market cap?
For buybacks financed with cash on hand, yes; although theoretically market cap would stay the same and stock price would go up.
They would take on debt knowing that market cap wouldn’t go up as much as the debt taken on. So total equity would remain below market cap and buybacks would raise stock price, subsequently raising value of compensation for the C-suite. Win-win for them.