Stock Buyback Myths

"Capital spending is four times bigger than stock buybacks."
- Nancy Lazar

[Coinpease]

This lady just straight up lies about stock buybacks not being a market wide problem and a bad economic practice. They're a method of reaching stock price goal bonuses for CEOs that come at the expense of everyone else in the economy, the worker who isn't paid more because you gotta raise funds to make the buybacks, the consumer who loses out on lower prices because the company failed to reinvest in making cogs lower, and the economy at large who misses out on tax revenue from laid off workers, laid off workers from other suppliers because of lowered production capacity, and tax write offs that are inezcusably available to the people commiting these horrendous practices. Stock buybacks weren't practiced between the great depression up until the Reagan administration. Since then, wages have froze in place, whilst stock returns have spiked. That's money that went from one place to another, for absolutely no justifiable economic reason other than "they can"

[wannaknowbad]

Too many Americans get their financial advice from millionaire politicians like Elizabeth Warren. Stock buy backs are good for the share holders. A lot of the people complaining about stock buy backs own the stocks in their 401k. If a company buys their stock back and it's too expensive it will hurt the company. People complain about the wrong things. Stock buy backs can be good.

[jesse_cole]

Who's this corporate apologist, and who does she work for?

[MegaSirpaul]

Plus, stock buybacks benefit the current stockholders. I've never understood why people hate on stock buybacks, if the company doesn't have any money to spend on their business buybacks are more tax efficient for the stockholder than dividends.

[jagotiberan]

Tell me you are a CEO without telling me you are a CEO 😂 only a CEO/partner with equity in a corp can make such silly claims without batting an eye

[Mark-elsb]

Stock buybacks are used by management to boost earnings artificially and thereby achieve their earnings targets and get their bonuses, as well as boost stock prices and the value of their options. All illusory, however, as earnings per share rise because of the buybacks, not organic growth.

[gregorsamsa]

Stock buybacks as large as a quarter of all capital expenditures is GIGANTIC

[barakas]

Is she limiting her comment to public companies?