Bharat Bhise: How to make money with stock buybacks

Bharat Bhise believes that for you to become a better investor, you shouldn’t underestimate stock buybacks. Understanding what they are and how they work can make you more money. A stock buyback is the re-acqusition by a company of its own stock, representing a more flexible way of returning money to shareholders. When a company buys it shares back, the value of the shares often goes higher, which means that the investors are making more money.

For example, if there are 100 shares in a company X and X is worth $200, each share is worth $2. If the company buys back 10 shares, you’re technically down to 90 shares outstanding. However, the company still birth $200. Note that the equity value is unrelated to the share count and is based on future profits. So with 90shares representing $200 in value, the share price moves up to $2.22 from $2.

You might wonder why companies would buy its own stocks, but it actually makes sense. A company has a certain amount of cash to spend for the coming period for operating expenses and long-term investments. When they have excess cash, it does not make sense to simply leave it there. The company will want to put that money to work while getting the cash back to shareholders. If the company buys its own stock back from the market, that same cash is being funneled toward an asset that can appreciate. Repurchasing outstanding shares can help a business reduce its cost of capital, benefit from temporary undervaluation of the stock, consolidate ownership, inflate important financial metrics or free up profits to pay executive bonuses. Shareholders will see the shares they still hold move up in value. In this scenario, everybody wins.

The next time a company initiates a buyback program, Bharat Bhise recommends that you consider buying the stock.

Bharat Bhise Keen on New Facebook Crypto

Cryptocurrency experts like Bharat Bhise are closely observing Libra, Facebook’s upcoming digital currency. The social media giant promises that Libra will trail a new blaze in the industry, rather than just becoming another form of cybermoney.

In its announcement, Facebook said that the new digital currency has a lofty goal of becoming a standard for online finances. Using blockchain, Libra joins other popular forms like Bitcoin and Etherium as part of the cryptocurrency field. However, instead of being a standalone currency, Facebook is launching its own digital wallet that exclusively uses Libra. Called Calibra, the wallet will be made available as a standalone app, as well as a connected app to other third parties like Messenger and WhatsApp.

Bharat Bhise is closely observing the new directions that Libra and Calibra want. If what Facebook says happens, the two new services will definitely open a new niche in the industry. Supposedly, the social media giant hopes to address the issue of financial inclusion with the launch of the new digital platforms.

Facebook also hopes that instead of dubbing Libra as just another form of cryptocurrency, users will liken the new platforms to other online payment systems like Paypal. According to tech website TechCrunch, Facebook VP for blockchain David Marcus has been quoted as saying, “If more commerce happens, then more small businesses will sell more on and off the platform, and they’ll want to buy more ads on the platform so it will be good for our ads business.”

This means that Facebook is likely targeting Libra and Calibra as long-term systems for both online and offline payments.

However, much of these is still in its starting stages, as both developments will not launch until next year, according to Facebook. Follow Bharat Bhise to get updated on these new developments as well as other updates in the field, today!