3 ms·
There is nothing wrong with stock buybacks, and the only people negatively affected by them are the investors who own the business.
by djbebs 4y ago
There is nothing wrong with stock buybacks, and the only people negatively affected by them are the investors who own the business.
- than3 4y agoDJ, you are very mistaken in that statement. Investing contains risks not suitable for everyone, and if you can't understand those risks ahead of time, perhaps you shouldn't be investing. If you do, there is a high likelihood that you'll eventually get really burned (lose money) and have only yourself to blame. Stock buybacks primarily enrich executives over the shareholders because much of their compensation is derived from it. Many companies, to avoid leveraged buyouts (hostile takovers) must carry a high debt to cash ratio. What happens to a brittle system, when there is a sudden economic event, and you were already up to your gills in debt (by default), and you funded the buyback with more debt? How is that terribly different from what happened with the Penn Central bailout and bankruptcy?