The three Dax companies are buying back a particularly large number of their own shares.
Dusseldorf According to Handelsblatt calculations, the largest listed companies in Germany want to spend 16.7 billion euros on buying back their own shares. That is almost as much as in the previous record year 2008: Shortly before the outbreak of the financial crisis, the Dax companies had used 16.9 billion euros for share buybacks.
Just at the beginning of this week, Dax newcomer Hellofresh announced that it wanted to buy back shares worth 250 million euros, shortly before BASF announced a three billion euro program. Linde, on the other hand, wants to take shares worth the equivalent of 4.3 billion euros off the market, and at Adidas it’s four billion euros.
Share repurchases tighten supply, and that drives prices up because shares are typically retired under these programs. Future earnings and dividends will then be spread across fewer shares, increasing per-share profitability. But according to experts, share buybacks are often an expression of a lack of strategic ideas.
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