rbreich ,
@rbreich@masto.ai avatar

Stock buybacks don't just line the pockets of CEOs and shareholders — they're dangerous.

Boeing failed to implement a $7B redesign of its 737 Max while spending that much per year on buybacks.

A dollar spent on buybacks is a dollar less spent to upgrade equipment and safety.

Lyle ,
@Lyle@cville.online avatar

@rbreich yes and they are by definition insider trading. When will the company buy its own stock? When the insider info it has shows it is most advantageous.

voron ,
@voron@mstdn.party avatar

@rbreich they were also illegal until the 1980s, and for good reason

arniepix ,

@rbreich
A dollar spent on buybacks is also a dollar less spent to fairly compensate the people who do the work that creates the value of the stock price.

PeterLudemann ,

@rbreich
And a dollar spent on dividends is also a dollar less to spend to upgrade equipment and safety.

The problem isn't buybacks (or dividends); it's management's priorities. But that isn't as snappy as a sound bite.

VE2UWY ,
@VE2UWY@mastodon.radio avatar

@rbreich

Now come on. You know very well that looters don't do “redesigns" …

voron ,
@voron@mstdn.party avatar

@rbreich greed is the opposite of empathy, why such actions come as a surprise to anyone beggars belief

kgoldsholl ,

@rbreich the point of buybacks is to drive share price up which inflates the value of stock options for executives. The impact on share price is also usually transient, so they are essentially burning cash to give execs stock-based bonuses. This is in addition to cutting expenses by reducing maintenance & quality budgets, to increase earnings, which also drives up the share price. Buybacks do NOT return cash to shareholders, it's a smokescreen for hiding bonuses.

mpjgregoire ,
@mpjgregoire@cosocial.ca avatar

@rbreich Should dividends be illegal too?

BluesHarp ,

@rbreich
Definitely a rigged system...

mvrenselaar ,
@mvrenselaar@mastodon.nl avatar

@rbreich and a sign management does not see other options that could benefit shareholders… so basically its a lack of vision.

Littlebobbytables ,
@Littlebobbytables@mstdn.social avatar

@rbreich Buy-backs are basically used to prop up EPS after dilution from all the stock grants.

jbhughes ,
@jbhughes@flipboard.social avatar

@rbreich Stock buybacks were illegal before Ronald Reagan's Presidency.

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