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I think you're failing to see the larger picture. Buybacks are the correct option for these companies, because otherwise they would be burning money on stupid
by tryptophan 7y ago
I think you're failing to see the larger picture.
Buybacks are the correct option for these companies, because otherwise they would be burning money on stupid projects or acquisitions. The money goes back to shareholders, via higher stock prices. They then need to put this somewhere, and many just buy more stock. Stock valuations rise(lowering expected returns), and this causes more sophisticated investors to leave the general public markets and look for opportunities elsewhere... resulting in the 'real investment' that you want. Large, established, public companies are NOT the right vehicle for this investment to happen through.
Also, you need to read through the fake news headlines a bit. The top 10 companies are responsible for a disproportionate amount of these buybacks. Smaller companies probably have ways to use the extra tax cut money. Apple may not have needed lower taxes, but pretending like all companies are in Apple's fortunate financial position, and hinging your argument on that is like arguing that lotties are the best use of money because you won the lottery.
- greesil 7y agoIt seems like he is seeing the bigger picture.
- dd36 7y agoWe need progressive corporate taxation.
- knowaveragejoe 7y agoDo we? Ideally corporate tax would be 0%, and the people actually pocketing cash out of the company entirely would be taxed.
- sova 7y agoYou mean embezzlement should be taxed
- knowaveragejoe 7y agoThe other reason this is a smart move for companies is that it gives them another tool for the upcoming recession that they can leverage to raise capital, should they need it.
- hn_throwaway_99 7y agoAs this is a direct response to my comment, I don't have the ability to downvote this, but everytime I read "fake news" these days I translate that to "this news that I disagree with that doesn't conform to my world view, so I'm just going to regurgitate the BS phrase 'fake news' without actually pointing out what is factually false."
- tryptophan 7y agoFake news, click-bait, misleading, agenda driven reporting; call it what you like. I did provide extra information to contextualize why I called it that, not sure why you are so mad.