Discuss the signal a large stock repurchase might foretell about management’s outlook relative to the future of a company. Explain whether a repurchase of stock is typically a good or bad sign. Provide a rationale for your response.
Large stock repurchase foretells that the management's outlook for the company is bleak for some future period. It is typically a bad sign because what a stock repurchase does is that it enhances the share value. This is done to keep the shareholders happy and maintain the share value rather than letting it to drop which will not be good for the company's image.
Jan 26th, 2015
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