WHY DO MOST COMPANIES BORROW MONEY TO BUY-BACK STOCKS ??? THEY

>>1549662
You mean repos? Easy

Get loan of X 1.1
Buy X shares with repo at 1.1
Market rises at 1.5 sell back X
Return loan X 1.1 plus 0.1 interest
X 0.3 profit

It makes sense for them to buy their own stocks because they can directly affect the price. Pretty safe investment for the lending bank.

>borrowing money to purchase stake in a business

yeah why on earth would people ever do that?

>>1549662
As well as all the other answers, debt interest is tax deductible i think

>>1549669

isn't that the ultimate form of insider trading?

>>1549962
Not really, because they're not directly affecting the stock price.
People may buy on the news, and this may create a snowball effect, but people don't buy unless they believe the prospects for a rise in the stock are there to begin with.
Otherwise, any company could successfully stay afloat forever simply by buying their own stock, even if the company itself was absolute shit.

>>1549662
welcome to 0 rates

financial magic makes money

it's straight up magic

>>1549829
Interest on the debt off your mortgage (only the money spend on your house) is tax deductable, in my country atleast

Think about it you pawned your equity to the American people. who payed you cash.

Now you want your equity back, and loans are the cheapest money around. So you borrow some cash and buy your equity for cash.

Its a typical cycle Public get less and less ownership/profit and eat inflationary dicks.
While inflation eats at the loans they just took.

Its pottery.

>>1550407
>Its a typical cycle Public get less and less ownership/profit and eat inflationary dicks.
>While inflation eats at the loans they just took.

Hold on, that makes no sense. Someone always has to own the company. There is always, at any time, a 100% ownership of all companies. I mean, what else could you suggest would happen?

Okay

Company A makes offering 49% to public
for say 490Million dollars

Current cycle happens
stock buyback in full force
banks buy corporate bonds at low rates say

company buys back 10% of shares outstanding
for 49Million + 1 million interest over 5 years

current ownership now (51+4.9)+(49-4.9)=100%
public gets less equity

capital is consolidating. the public gets less
and less gains.

Inflation positively affects equity and negatively affects debt.

don't know how you misread that.