5 ms·
We have the same discussion here in the Netherlands now, one of the poster childs of the (entirely rightful) public anger being Booking.com. Companies like thi
by w0utert 6y ago
We have the same discussion here in the Netherlands now, one of the poster childs of the (entirely rightful) public anger being Booking.com.
Companies like this have been raking in billions of revenue and profit until very, very recently, but instead of using even a tiny proportion of it for contingency planning they decided to take on more debt and buy back their own shares to boost their stock price instead, to 'reward' their shareholders. And at the same time they used every loophole imaginable to evade taxes, effectively contributing next to nothing to tax revenue to be used for the public cause.
Now things went sour and within 1 month they are already out of money and cannot continue paying their employees, so they are begging to be bailed out with money that was intended to save small businesses that were forced to close by the government. They made $15 billion of profit last year alone, which would be enough to pay their ~17.5K employees for years to come, but decided to throw it at all their shareholders. The hotels and BnB's that use their platform will go down because the government aid is limited, but Booking.com needs to be saved...
Privatize the profits, socialize the losses, always the same thing. It's frankly quite disgusting and I have no sympathy for these companies at all.
- matonias 6y agoMore info (in Dutch): https://www.ftm.nl/artikelen/bookingcom-staatssteun-coronacrisis https://www.ftm.nl/artikelen/bookingcom-staatssteun-coronacr...
- haissam 6y agothis opinion piece on the NY times mentions Booking, and sums up the situation quite well. Its conclusion if you don't have time to read it entirely: > The economy needs help, and fast. Yet it is hard to escape the conclusion that the $2 trillion aid package validates and indeed further rewards the questionable practices of the last decade. In a normal bankruptcy proceeding, equity holders and shareholders would incur significant losses based on the taking of risks that were not unknown. It is true that the $2 trillion aid package has a condition that would, going forward, temporarily bar further stock buybacks for companies that receive taxpayer loans. But viewed in context, the relief package still amounts to a bailout of private capital and the endorsement of a decade of self-enriching practices.
- toasterlovin 6y agoFWIW, a really good (in my opinion) reason to return profits to the owners via dividends or buybacks is that management can often not be trusted to act responsibly when they have access to a huge pile of unused cash. And I think it's worth keeping in mind that many of the owners are normal people and/or normal people's pension programs.
- yohannparis 6y agoWhy do you invest in a company if you do not trust it to manage itself? Otherwise, it is not investing, but speculation that stock value will rise to sell for a profit.
- toasterlovin 6y agoWhy are balance of powers necessary in politics? Why not just elect a president or PM that we can trust not to abuse their power?
- zentiggr 6y ago> "Normal people" "Normal people's pension programs" Thank you for targeting precisely the guilty parties driving the buybacks and 'dividend pumping'... We have met the enemy and they are us... I swear the only way to curb the greed that screws ourselves over is to make every corporation into a non-profit.
- viklove 6y agoInvesting in a 401k does not make you a hedge fund manager. Passive investors don't make decisions and do not vote, and thus have no impact on the choices execs make. Most people just tick a box when they start a new job and never take action on their retirement accounts. The ones who benefit from stock buyback programs are board members and executives who hold large amounts of stock. When they initiate stock buyback programs, their assets spike in price and their wealth grows. It's nefarious to ignore this and point the finger at the people getting screwed over the most by these tactics (the general public).
- rajnathani 6y agoIs there a source for the '$15 billion' in profit for last year?
- rwmurrayVT 6y agohttps://finance.yahoo.com/quote/BKNG/ https://finance.yahoo.com/quote/BKNG/ Booking Holdings owns booking.com, kayak, priceline, agoda, cheapflights, opentable, and a few more.
- rajnathani 6y agoThe source above shows around $4.9B in profit (net income) for last year. The revenue is what shows as $15B.