I don't know why investors tolerate managers buying back their own stock (okokok, it is because there are tax advantages). In some cases it can be extremely beneficial to stock holders, but in many cases it is about the easiest way to burn cash.
If your company is overvalued, buying back your own shares is extremely destructive. Paying $1 for something that is worth $.90 is an instant loss of 10%. That isn't great.
I'd much rather get dividends so I can invest the money.
@khalidabuhakmeh In a supply and demand sense maybe, but my point is that the cash flow generated by a business is independent of its number of shares.
That cash flow can be used to determine how much that business is worth. If you buy shares that are cost more than the intrinsic value of the shares you are destroying value. Just like any other commodity or product.
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