Description: Technology giant Samsung cheered up its investors recently through a major share repurchase. With profits falling, Samsung dug into its treasure chest of cash to placate investors, giving it time to rethink strategy. Samsung appears to be following the trend of several US technology companies that have used their cash surpluses to buy back stock, thereby increasing earnings per share.
Date: November 26, 2014
1) As a strategy, what do you think of share buyback as a use of a cash surplus?
2) How would a repurchase of shares impact the financial statements of a company like Samsung?
3) What are some of the strengths and limitations of Earnings per Share as a performance measure?