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Not profits but debt. With the ultra-low interest rates of the last ten years, companies could finance bonds at rates just above inflation. However, instead of
by mountainofdeath 7y ago
Not profits but debt. With the ultra-low interest rates of the last ten years, companies could finance bonds at rates just above inflation. However, instead of using those funds to grow the business (e.g. R&D), they simple bought back shares, increasing the price of the stock.
- ailideex 7y agoCan you cite? What companies are using debt to finance repurchases? Also the person you responded to probably meant that they profit in a technical bookkeeping sense not. You can still have profit while having debt and profit will be taxed in a certain way.
- rezistik 7y agohttps://fortune.com/2019/08/20/stock-buybacks-debt-financed/ https://fortune.com/2019/08/20/stock-buybacks-debt-financed/ https://www.cnbc.com/2019/07/29/buybacks-companies-increasingly-using-debt-to-repurchase-stocks.html https://www.cnbc.com/2019/07/29/buybacks-companies-increasin...