CEU Electronic Theses and Dissertations, 2023
| Author | Sedlar, Peter |
|---|---|
| Title | Stock Buybacks in Publicly Traded Corporations in the USA: Practice, Shortcomings, and Risks |
| Summary | The topic of this thesis is the assessment of the benefits and risks corollary to stock buybacks based on the US experiences with a primary focus on the legal aspects but including the points of view of finance, economics, and business as one of the alternative ways to reward shareholders instead of paying dividends and analyzing the risks of such practice. This analysis is done primarily through the lenses of the relevant corporate laws of New York and Delaware as the jurisdictions having the most experiences with buybacks as well as the model law of the majority of the US states. The thesis aims to better understand the practice of buybacks by answering the following research questions. First, why are buybacks resorted to in the US, and why is the number of buybacks the highest there? Second, what regulatory mechanisms exist in the US on the federal and state level for supporting stock buybacks? Lastly, can the regulatory tools developed in the US be utilized in other developed economies such as the European Union, United Kingdom, or Japan? While stock buybacks are widely utilized in the US, they are rarely resorted to in other contemporary economies. The US possesses therefore the most tested legal system for this practice. Consequently, it is the most suitable legal system that can be used as a model that could provide useful insights into the functioning of this practice over the decades of the existence of this mechanism. Even though the EU is the second biggest player in the globalized world of big corporations and financial markets (with or without Brexit), this practice is marginal in comparison with the US. Consequently, the number of publications on this practice in the EU is scarce. Even less in countries such as Slovakia without a full-functioning stock exchange. The methodology of this thesis is built on the statutory analysis of law, complemented for deeper understanding with legal scholarly publications along with empirical study based on relevant case law. As the question in the focus of this thesis transgress the confines of law and tends to change at various times, resorting to general media is a must, particularly the leading financial newspapers. The picture of the real world is complemented by statistics and quantitative data analysis. |
| Supervisor | Tajti, Tibor |
| Department | Legal Studies LLM |
| Full text | https://www.etd.ceu.edu/2023/sedlar_peter.pdf |
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