Loooooool.
With artificial increases in value?
Wow. How far things have fallen
Smh
People now support corporate payouts because they get pennies if they are invested...in the short term.
Lol. Wow.
Do you understand what a stock buyback is? The purpose of issuing stock is to sell equity in a business to raise capital to invest in the business. If there are no attractive opportunities to invest then the business is obligated (but not required) to return that capital back to the shareholders. They can do that with a dividend but that’s a pain to start and stop or change. It’s a lot less complicated to undilute the existing shares by buying some of the shares back and dissolving them, thus increasing the value of the remaining shares in proportion to how many were dissolved. It doesn’t destroy money. The business can always issue new shares in the future and undo the buyback. It’s basically the same thing as paying off a loan or line of credit held by the shareholders.
This is all true. It was also illegal prior to the Reagan administration due to it literally being market manipulation that basically only benefits a-list investors, for whom it is a much lower tax burdened gain in their wealth.
Investment used to be a much longer term strategy. Investors used to understand that not every single year is going to give them a gigantic year over year return. Stock buybacks should be made illegally again. Corporate profits should be used for reinvestment (which is not taxed) or paid out as dividends (which are taxed).
Lots of shills in this thread defending buybacks like they're some kind of legitimate investment strategy. Can they be used wisely? Sure. Are they ever used in ways other than to manipulate the market and enrich the already rich? Nope.
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u/ErictheAgnostic 5d ago
Loooooool. With artificial increases in value? Wow. How far things have fallen Smh People now support corporate payouts because they get pennies if they are invested...in the short term. Lol. Wow.