5 ms·
No non-trivial company can reasonably be expected to stay in business when 100% of their client base is literally prevented from doing any significant business
by himinlomax 6y ago
No non-trivial company can reasonably be expected to stay in business when 100% of their client base is literally prevented from doing any significant business for months and likely to go bankrupt themselves.
The stock buyback thing is just idiotic. It's just dividends by another name.
Boeing/Airbus are not responsible for the current crisis, unlike the banks in 2008.
- bigie35 6y agoRight, but should they spent 90% of their free cash flow doing a stock buy back? Not a sound business practice IMHO.
- asino 6y agoWhen a company (or anybody) has cash can do 4 things. (Assuming that the level of debt is sustainable.) 1 reinvest in new projects 2 put the cash on safe assets (bonds) 3 buyback 4 give back as a dividend Buyback is more tax efficient than dividends. What would you have done,if you were Boing CEO?
- wonderwonder 6y agoYour comment is missing the point that you can do all of these things at once. They could easily put 80% into safe assets / employee 401ks, new project funds etc. and then spend 20% on buy backs. The focus on buy backs is due to the fact that American business ties executive bonuses to share valuation.
- gshdg 6y agoThe GP’s point is that the system that incentivizes this is flawed and needs to change. Do you disagree?
- michaelt 6y ago> What would you have done,if you were Boing CEO? If you're Microsoft or Apple or Google, the answer is "Hold hundreds of billions of dollars of cash" [1] That article, from late 2019, feels such holdings are in need of explanation; today, they seem like common sense. [1] https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet-are-sitting-on-more-than-100-billion-in-cash.html https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet...