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In theory, yes, they could protect their workers' job security with a stock offering. They are incentivised to protect the interests of their shareholders. Un
by findthewords 6y ago
In theory, yes, they could protect their workers' job security with a stock offering.
They are incentivised to protect the interests of their shareholders.
Unions are set up to (N/A in USA) protect the workers.
- throwaway287391 6y agoAgreed, but then it seems to me that the buybacks are kind of besides the point, and the real underlying issue is that they don't care about their workers (and/or aren't incentivized to), no? In terms of future flexibility / robustness to unforeseen emergencies, sitting on a big pile of your own stock doesn't seem that different to me from sitting on a big pile of cash, except in terms of the risk profile. (In contrast to paying a dividend, where they really can't recoup the cash if they need it.) I could easily be missing something though...
- lotsofpulp 6y ago> that they don't care about their workers (and/or aren't incentivized to), no? It is generally assumed that decision makers will care more about their own wealth than other people’s wealth.
- throwaway287391 6y agoRight, I'm just trying to understand the notion that stock buybacks are somehow particularly bad in this regard.
- zb 6y agoThey’re not ‘sitting on’ a pile of stock; it gets bought back and cancelled. A company can issue more stock any time it likes, so in that sense every company is ‘sitting on’ an infinite pile of its own stock all the time.
- throwaway287391 6y agoAh, thank you. I didn't understand that and now this all makes a bit more sense to me.
- snuxoll 6y agoA company doesn't have to destroy the shares they buy back, they can opt to retain them and use them for employee compensation or later reoffer them.