(20) Copying The Footprints Of The Competitor
It is one of the most ridiculous reasons for company’s shares buyback proposals. All companies are known to have one or more competitors in the industry or sector or even in stock markets.
They are trying & implementing every strategy to lead their competitors. However, certain companies are likely to follow the footprints of their peers just to stay tuned with the latest developments.
Stock buyback program is also a mechanism that can sometimes arise out of competition. For example, if one company is bringing stock buyback offer then its competitors from same sector may also bring the same offer.
Similarly, if one company who is leader in the stock market in terms of market capitalization is bringing stock buyback offer then its next competitor who is standing on second position may also bring the same offer.
This can happen even when both the companies are completely unrelated to each other in terms of their business sector they are working.
Thus, stock buyback program can also be implemented because others are also bringing the same offer.
[Read Also: 17 Basic Rules Of Investing Money In IPO Stocks]
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- Reasons Behind Company’s Buyback Offer: Shutterstock