Some argue that management should repurchase shares when its shares are undervalued. Let's suppose management believes that the current share price of the company doesn't reflect its underlying potential, so it buys back shares today. One year later, the market price adjusts to reflect management's expectations. Has value been created? Once again the answer is no, value has not been created; it's only been shifted from one set of shareholders (those that sold) to the shareholders that did not sell. So the holding shareholders may have benefited, but the shareholders as a whole were not
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