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Originally Posted by Ducay
This isn't intended as an insult to the above posters, but "buybacks" are the new "executive bonuses" as the boogeyman of evil corporations. People throw the term around like candy as a proxy for corporate greed.
Truth is, you can do buybacks at the same time as layoffs. Both can be good business decisions in a poor market and are not mutually exclusive. A stock buyback is literally just investing in your own company when the market prices are advantageous or undervalued.
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Disagree. While yes, buybacks can be totally benign in some scenarios, we now see buybacks at levels never seen before across industries.
This indicates that capital is so plentiful, that businesses can't keep up with allocating capital to their core value creation streams. It's a cheaper/easier lever to pop numbers for quarterly reports to make the execs look good. The whole point of capitalism is that capital gets allocated to value creation, and value creation has a side effect of job creation. The entire system is so slanted toward corporations right now that they have to find a way to basically dispose of their excess capital.