What Does It Mean When a Technology Company Starts Paying Dividends or Repurchasing Its Stock? - Technology is a race that has no finish line. If a tech company has no new growth opportunities – if it doesn’t have enough new “question mark” products, then doesn’t that mean it will eventually lag? And if a tech company finds nothing better to do with its cash than to return it back to its shareholders, in the form of dividends or share buybacks, then isn’t that a hint that it is running out of new growth opportunities? Don’t dividends and share buybacks indicate that the company has shifted from its Product Life Cycle “Growth” stage to “Maturity” stage? Doesn’t that mean that it isn’t a growth investment anymore?
What do you think?Stockmarket
What Does It Mean When a Technology Company Starts Paying Dividends or Repurchasing Its Stock? - Technology is a race that has no finish line. If a tech company has no new growth opportunities – if it doesn’t have enough new “question mark” products, then doesn’t that mean it will eventually lag? And if a tech company finds nothing better to do with its cash than to return it back to its shareholders, in the form of dividends or share buybacks, then isn’t that a hint that it is running out of new growth opportunities? Don’t dividends and share buybacks indicate that the company has shifted from its Product Life Cycle “Growth” stage to “Maturity” stage? Doesn’t that mean that it isn’t a growth investment anymore?
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