Buffett believes buybacks are beneficial to shareholders for one simple reason: You don't need to spend a dime to increase your percentage of shares held.
"Through that simple act, we increase your share of the many controlled and non-controlled businesses Berkshire owns," Buffett said in his 2021 annual letter.
The 93-year-old legendary investor believes that it would be "value-destroying" if he overpaid for Berkshire shares.
"If you're repurchasing shares above a rationally calculated intrinsic value, you are harming your shareholders, just as if you issue shares beneath that figure, you are harming your shareholders," Buffett once said in 1996.
The Wall Street firm projected that Berkshire repurchased almost $2.5 billion worth of stock in the second quarter.
Persons:
Berkshire Hathaway, Warren Buffett, Greggory, Buffett
Organizations:
Morningstar, Oracle, Berkshire, Berkshire Hathaway, UBS, Street, Berkshire repurchased
Locations:
Greggory Warren, Berkshire, Omaha, repurchases