Bank of America said that it will buy back an additional $5 billion of its own stock, just five months after announcing a $12 billion repurchase.
This latest buyback activity signals to investors that the firm sees its stock as attractively priced, and the action itself should be accretive to shares.
The Federal Reserve gave approval for the capital plans of many Wall Street banks back in June, and this is an extension of that.
Bank of America thinks its stock is cheap. And to show you that it’s serious, the firm is going to buy back some more of its own shares.
Just five months after announcing plans to repurchase $12 billion of common stock over a one-year period, the bank said on Tuesday that it will buy back an additional $5 billion by June 30, 2018.
With this latest development, Bank of America has once again signaled to investors that it sees its stock as undervalued — hence its willingness to fork over cash to buy shares at current levels. And in a win-win of sorts, by reducing the number of shares outstanding, the firm will drive the price higher for its remaining stock.
It’s …read more
Source:: Businessinsider – Finance