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Analysts Weigh up AMD’s Share Repurchase Program


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Advanced Micro Devices () hasn’t had a great year, with shares falling 16% since the start of 2021. Should investors be worried about this underwhelming showing? Not according to the semiconductor giant. In fact, going by the company’s latest actions, quite the opposite.

 

On Wednesday, AMD announced an unprecedented share-repurchase program. Over an unspecified period, the company will buy back $4 billion’s worth of stock – funded in its entirety by cash generated from operations.

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5 hours ago, ENTERPRISE said:

 

...I've never been a big fan of companies buying their own stock back - at the very least, it is inefficient from an economist's point of view as the money spent on its own stock actually doesn't do anything productive. It can also get very 'addictive' to a company's management, whose leadership's pay is linked, among other things, to the stock price, not to mention their own stock options...

 

...AMD has done exceptionally well to come out of the hole it found itself in a few years back, with questions then whether it would even survive and not go bankrupt. Since then, it enjoyed a meteoric success via Ryzen et al, but the stock became a 'darling' of investors and was a bit overbought / overvalued (I bought and sold AMD stock on the way up). IMO, it would have been better to let the market sort it out instead of artificially pumping up its stock price via 'self purchase'; unless there was some sort of short-seller attack happening. 

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