Barry Ritholtz, Columnist

Share Buybacks Work Better in Theory Than in Practice

The main problem is that effects of bad decision-making don't become clear until much later.

March 12, 2018 at 4:20 PM UTC

Barry Ritholtz is a former Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

Champion share repurchaser.
Photographer: Michael Nagle/Bloomberg

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The Corporate Finance Institute says stocks buybacks are a “win-win situation for both companies and shareholders.” Some members of the CFA Institute, which publishes the Financial Analysts Journal, take a different view: "favorable regulatory and tax treatment of buybacks is misguided and should be reformed.”

So, are buybacks a “win-win,” and if so, for whom?