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Returning money to investors is great, whether it’s buybacks or dividends. It’s the core purpose of a company. The primary alternative is growing the bigcorps e
by sclarisse 4y ago
Returning money to investors is great, whether it’s buybacks or dividends. It’s the core purpose of a company. The primary alternative is growing the bigcorps ever bigger, more powerful, and dangerous. Ever-expanding bloated conglomerates.
The good argument against buybacks is that companies tend to do it when the stock is high, and that’s bad for the shareholders.
- lesuorac 4y ago> It’s the core purpose of a company. It's not though. A state (New Jersey for J&J) gave the company a charter to do X. J&J's charter was not to return money to shareholders [1]. [1]: https://www.investor.jnj.com/_document/johnson-johnson-restated-certificate-of-incorporation?id=00000159-896a-d8a5-afd9-bffb0f310000 https://www.investor.jnj.com/_document/johnson-johnson-resta...
- sclarisse 4y agoI feel like there’s probably a more meaningful counterpoint to be presented here than a legal document which describes the purpose of J&J as, quote, “to engage in any activity within the purposes for which corporations may be organized under the New Jersey Business Corporation Act.”
- lesuorac 4y agoDo you have a document stating that J&J's purpose is to buy back stocks? As it stands, I have a legal document under penalty of perjury that says their purpose is to do business as allowed by NJ. And you _just_ have a statement made by yourself without penalty that their purpose is to return money to investors. Sure, my document doesn't say they can't do buybacks. But to say the document calls it their purpose is highly misleading.