Stock buyback isn't a total scam as it seems, but it does mean "we can't figure out any productive use case for this cash in advancing R&D or scaling our business anymore" which is still pretty worrying
Stock buyback isn't a total scam as it seems, but it does mean "we can't figure out any productive use case for this cash in advancing R&D or scaling our business anymore" which is still pretty worrying
I suppose stock buybacks are similar to dividends in that regard
It’s more like, “the executives with lots of shares can’t see how to make the company grow, so they’ll just use profits to pump up the share price for their gain”.
I deeply feel buybacks shouldn’t be illegal but treated shamefully.
Instead of using profits to build up long term savings or fund R&D, they basically choose to do as little as possible.
There is no vision.
> Instead of using profits to build up long term savings or fund R&D, they basically choose to do as little as possible.
Isn't buying stock a form of long term savings? After all, they can always sell that stock when they want to "withdraw".
Sure, they may not get the same return as simply stashing it into a bank account, but it's also a statement of confidence in their future: "We are sure that our stock will outperform every other option there is for storing our money, because our long-term plans include extracting more profit from the market."
Realistically, if the execs think they can't do R&D then they can't. If they tried they would just waste the money.
Should companies never pay dividends?
Investments into vision can juice the stock price too. So they would do it if they had good realistic inspiring ideas
By that logic, any profit a company distributes to shareholders is worrying.