QUALITY MATTERS, NEVER Ever buy back trash, junk or rubbish in ABUNDANCE ! ... One other thing - executives use buybacks to offset compensation, they issue themselves shares or options, and then get the board to approve a stock buyback to counter the effect of dilution. If you're asking yourself "wait, so buybacks can be used as a tool to transfer shareholder money to the executives?" then you've got it figured out, that's exactly what they can be used for. And they often are.
No one should be surprised that cash-rich corporations (and their executives) are being risk-averse or thinking about short-term profit-boosting and self-gratification. Corporations are people, too, remember?
QUALITY MATTERS, NEVER Ever buy back trash, junk or rubbish in ABUNDANCE ! ... One other thing - executives use buybacks to offset compensation, they issue themselves shares or options, and then get the board to approve a stock buyback to counter the effect of dilution. If you're asking yourself "wait, so buybacks can be used as a tool to transfer shareholder money to the executives?" then you've got it figured out, that's exactly what they can be used for. And they often are.
ReplyDeleteNo one should be surprised that cash-rich corporations (and their executives) are being risk-averse or thinking about short-term profit-boosting and self-gratification. Corporations are people, too, remember?