Part 5/8:
While the benefits of stock buybacks are evident, there are accompanying risks. Critics argue that such programs may divert critical cash resources away from a company, leaving them financially vulnerable during economic downturns. This was particularly evident during the COVID-19 pandemic when companies that engaged in extensive buybacks faced scrutiny after seeking government assistance.
Moreover, the cessation of stock buybacks could signal a lack of confidence in the company’s financial stability, prompting investor concern. Despite Apple’s current standing, the question arises: what if the company scales back on buybacks?