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Remember that debt fuelled stock buybacks were a huge reason for propping up stock prices for these companies as well. Now that cheap debt is off the table, th
by puranjay 4y ago
Remember that debt fuelled stock buybacks were a huge reason for propping up stock prices for these companies as well.
Now that cheap debt is off the table, that buyback strategy will have diminishing impact as well, forcing companies to find other ways to keep stock up (such as cutting costs)
- FooBarBizBazz 4y agoI don't think VC-backed startups typically do stock buybacks? That's more of a Fortune 500 thing, AFAIK. "Startups" (of whatever size) are always concerned about the next funding round; I don't think they're going to burn runway to prop up the share price. It's companies like GE and IBM that do that, AFAIK.
- puranjay 4y agoI was referring to the OP’s comment that established publicly traded tech companies too will be under pressure to keep the stock price up and thus, aren’t immune to layoffs
- FooBarBizBazz 4y agoI see. You have a point there. That would cement, in my mind, their transition from "growth" to "utility" companies, though, and I would expect them to start paying dividends.
- colinmhayes 4y agoI mean the established big tech companies are sitting on mountains of cash. I suspect they’ll start ramping up buybacks even more aggressively due to what they see as undervalued equity.
- datavirtue 4y agoYep, blowing the cash on stock buybacks. And then layoffs when the cash gets uncomfortably low.
- ethbr0 4y agoThe cash won't get "uncomfortably low" for profitable money printing machines (e.g. Apple) for quite a long time. They just won't have quite as obscenely large of a dragon-esque hoard to sleep on.
- unicornmama 4y agoHammer and anvil.