Stock Buyback Plans Can Backfire

Stock Buyback Plans, Seen as Shareholder Boon, Can Backfire Stock buyback plans are a boon for shareholders, right? That’s been the spin, anyway, as hedge fund activists have pushed corporate managers to spend billions repurchasing shares in recent years. But not all stock buyback plans are created equal, and exhibit A is LPL Financial Holdings, a brokerage and investment advisory firm in Boston. LPL recently completed a $275 million stock buyback spree that was exceedingly costly, increased the company’s debt and wound up primarily benefiting a powerful insider investor. Shareholders typically like repurchase programs because…