[JMTQp8lwXL]

It's a more tax efficient way to return value to shareholders without forcing shareholders to realize taxes immediately. Shareholders can choose to sell on their own timeline, thereby choosing when to realize any capital gains taxed paid.

A secondary reason would be lack of better options to spend the money on (no R&D investment opportunities).

Compared to other sectors, tech is more efficient with its revenue, so it leaves more money behind, which is available to use for buybacks.

[sohei]

This is the story people tell in business schools and economics departments, but there's more to it than that.

It's also a way to sterilize new issuance to employees, primarily senior management. In a very real sense, it can be a backdoor payment to management. Issue shares to management. Buy shares on the market. Net effect is cash to management.

If buybacks are funded by debt issuance, it's also a way to lever the company. Remember Apple and Carl Icahn? That particular episode looks a lot like greenmail. Apple bought back shares, mainly from Icahn, so that Icahn would go away. The buybacks weren't exclusively from Icahn, so it wasn't technically greenmail.

[simonblack]

It's a more tax efficient way to return value to shareholders

Only if you want to sell those shares in the very near future. A little while down the track when the stock price has dropped again, all that spent cash has just been frittered away needlessly, blown away in the wind.

[version_five]

> tech is more efficient with its revenue

Interesting way to put it

[yellow_lead]

Digital goods are less costly to manufacture on a per-item basis than widgets.