Hedge Funds Love Buybacks, But Do They Work?

“Those loudmouthed hedge funds” are behind the “runaway fad” of stock buybacks, according to Forbes magazine. The article says that many hedge funds are pressuring companies to repurchase their shares on the “belief that the repurchases will prop up demand for a stock, giving it a quick boost that the funds can cash in on.”
But Forbes also notes that, while buybacks are similar in many respects to the payment of dividends, buybacks offer no guarantee that stockholders will benefit in the long term.