Combined, but heavily concentrated at the top, the companies in the S&P 500 Index bought back a record of $234.5 billion of their own shares in Q3 2021, according to preliminary estimates by S&P Dow Jones Indices, blowing by the previous record of $223 billion in Q4 2018. And there’s more coming, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, cited by the Wall Street Journal: Buybacks in Q4 would set a new record of $236 billion, he said.
But note how buybacks collapsed to $89 billion in Q2 2020 and to $102 billion in Q3 2020, after share prices had plunged. This was based on the corporate strategy of buying high to drive up share prices even further when they’re already high, and not buying when share prices are low.
When prices are high, this is also when insiders are dumping their shares, as they’re now doing, and it’s that much more important for companies to buy back those shares that insiders are dumping.Share Buybacks Surge to Record ahead of Potential 1% Tax: Companies Buy as Insiders Dump like there’s No Tomorrow | Wolf Street
Got pump and dump con?