4 ms·
Since they took the wealth that they should have been putting aside to weather economic downturns and invested it in their own stock surely they can simply sell
by Taniwha 7y ago
Since they took the wealth that they should have been putting aside to weather economic downturns and invested it in their own stock surely they can simply sell all that stock to raise money rather than needing to be bailed out?
Of course they made a poor investment choice, they invested in a company that wasn't prepared for what's happening now, so they'll lose money on their investment.
("but our stock price will go down!")
Better than going to 0.
- concerned_user 7y agoI am not an investor nor economist, I had a course on technical analysis of stock markets so I have some understanding. To me it seems like a very strange idea to put safety fund into your own stock. If things go bad your stock will be dropping. Sane thing to do if you want to save that value is to buy government bonds or other securities not your own stock.
- nabla9 7y agoBuyback is alternative to dividend. It's a way to give money to shareholders. Stocks bought are usually canceled. In other words, those stocks bought don't show in the company balance sheet as assets they own. They are gone, they are not investments.