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Fred is just wrong on this. Companies exist to enrich the shareholders. A buyback is very much like a dividend, and should be viewed similarly. Is he saying tha
by damoncali 16y ago
Fred is just wrong on this. Companies exist to enrich the shareholders. A buyback is very much like a dividend, and should be viewed similarly. Is he saying that companies shouldn't pay dividends? That's insane. A company with too much cash is wasting it's investors' money.
- pbhjpbhj 16y agoI thought he was basically bemoaning the capitalist carrion call "Companies exist to enrich the shareholders." and suggesting that there was greater worth available in investing the monies rather than handing more profits back to shareholders.
- fredwilson 16y agoDamon I like dividends for mature cash flowing businesses who cannot find a good use of their cash Fred
- d2viant 16y agoYes, but you're paying a hefty price to get your money that way -- mainly the double taxation on dividends. Stock buybacks can be a more efficient way of returning that cash to shareholders.
- damoncali 16y agoFair enough. But it sounds like what you're really saying is that you prefer growing companies to mature companies, not that buybacks are intrinsically bad.