Subjunctive posted:

Buybacks are more common than I had thought, huh, but anyway they don’t always increase stock price

and companies generally don’t pay a premium over the market for the stock they buy back, so you’re again at “someone else will want to pay more than I did for it”, but “someone else” can include the company itself. The company may have its stock price increase because it will increase EPS, generally taken as a sign of increased financial health but in this case not really indicating such, but the price increase is often quite temporary. And companies generally, to my knowledge, do not announce price targets or commit to a buyback plan over the long term (one reason they’re preferred over issuing dividends: easier expectation management of shareholders), so you are again gambling not just on how the company might use “excess cash”, but how the market (of speculators) will react if they use it for a buyback.

Dividends and buybacks are “priced in” to the extent that the market is perfectly efficient in operation and distribution of information, which is to say entirely theoretically. Splits don’t increase the value of a company, but they more often lead to share price increases than decreases, similarly. The value of publicly traded shares is influenced more by prediction of others’ behaviour than by anything that flows from a pretty economic principle. Public stocks swing wildly during periods where there is no materially new information about the company…except for recent changes in its stock price. loving momentum, man, who believes this poo poo?

If you’re buying a stock in order to benefit from a future stock buy back, you’re lying to yourself just as much as if you bought in hopes that a dividend would be offered in the future. (Or you’re insider trading.)