Businessweek Explainer: Buybacks

The transcript discusses the increase in share buybacks, noting a 55% rise from the previous year, with companies on track to buy $740 billion worth of shares. It highlights the impact of buybacks on share prices, which tend to rise by about 2.5% more than expected. The transcript also points out that executive sales double in the days following buyback announcements, with sales values five times higher than usual. This raises concerns about potential legal stock manipulation. SEC Commissioner Robert Jackson suggests rewriting rules to prevent insider sales shortly after buybacks, but SEC Chairman Jay Clayton has not agreed to this proposal.

What percentage increase in share buybacks was observed compared to the previous year?

• 65%

• 55%

• 45%

• 75%

What is the projected value of share buybacks for the current year?

• $940 billion

• $840 billion

• $740 billion

• $640 billion

How much did share prices typically rise after a buyback announcement?

• 2.5%

• 2%

• 1.5%

• 1%

What behavior was observed among executives following buyback announcements?

• They bought more shares.

• They sold more shares.

• They held onto their shares.

• They shorted the stock.

What change does SEC Commissioner Robert Jackson propose regarding buybacks?

• Ban buybacks entirely.

• Increase buyback limits.

• Allow unlimited insider sales.

• Restrict insider sales post-buyback.