3 ms·

This gem was front and centre: "The language would also re-affirm that the purchase of stocks and dividends are not an eligible use of CHIPS funds as determined

This gem was front and centre: "The language would also re-affirm that the purchase of stocks and dividends are not an eligible use of CHIPS funds as determined by the eligible use of funds already required under the FY21 NDAA." I looked, but couldn't find when this started becoming a thing. How has this not been common boilerplate for any and all government grants/loans/investments?

BeetleB 4y ago
I don't think this will make a difference. Money is fungible. If my operating expenses are $5B, and I'm getting $1B from the CHIPS Act, I'll simply apply that $1B to my operations, giving me $1B from the $5B to use for buybacks. Or more likely, I'll use $0.5B for buybacks and use the remaining $0.5B for operations. This way I get to do more buybacks while still utilizing the government money for accomplishing more than I could without it.
- sitkack 4y ago
  Any entity taking CHIPS money should be precluded from having any buybacks precisely for this reason.
  - thelamest 4y ago
    In general, stock buybacks aren’t socially undesirable, but in this case would be more troubling I guess as they signal the company feels its R&D spending potential was already saturated.
  - powerhour 4y ago
    Hell, we could even resume the prohibition on buy backs in general.
singhrac 4y ago
At least amongst a certain subgroup of the US, there's been a lot of backlash against "privatizing profit and socializing losses" (or lemon socialism). Many people pointed fingers at airlines needing a bailout in 2020 even though they had bought back shares for a decade. I guess the US is just very against the idea of equity-based bailouts (i.e. US govt owning a portion of the airlines).