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Share buybacks are not even close to the same thing as wash trading. Please don’t make assertions that are obviously untrue. Wash trading creates fake sales da

Share buybacks are not even close to the same thing as wash trading. Please don’t make assertions that are obviously untrue. Wash trading creates fake sales data at successively higher prices to create the illusion of demand and liquidity. Share buybacks are a corporation buying back shares (on a regulated public market) and ‘retiring’ them to reduce the amount of shares outstanding, which makes each share worth a little bit more. How are these even remotely similar?

nico 3y ago
> How are these even remotely similar? In both cases the original owners are buying their own assets in a public market and driving the price up You explained how they are also very different in the way they are done and regulated, but they are definitely more then “remotely similar” In the case of public companies, retiring really doesn’t mean anything. Just like they can retire the shares, they can issue and sell more. Of course as you pointed out it happens in a relatively transparent way and it’s regulated
- function_seven 3y ago
  > In both cases the original owners are buying their own assets No. In a share buyback, the company is buying assets from other people. In wash trading, the current owner is “selling” the assets to themselves. (Or they’re working with someone else to do a loop) And the retirement of these assets is different than the plan to sell them to another buyer.
  - nico 3y ago
    It’s called buyback because the companies are buying back their own stock It’s akin to the loop you describe, they sell the stock to someone else, then they buy it back I’m aware the timing, the disclosures, the regulations, etc are different The mechanism is still the same, they buy their own thing to make the price go up
    - function_seven 3y ago
      The timing changes everything. In a wash sale I immediately churn the asset with successively higher “selling” prices. In a buyback, the sale was many years ago, to someone else in the market. That’s makes all the difference. Just like if I buy a share of AAPL in 2007, sell it in 2011, buy another one in 2015, and sell that one in 2023. I did absolutely no wash trading. I just entered and exited a position a couple of times. Buy backs are a one-way event. They’re not a loop for the purposes of artificially increasing market cap. If the company decides to offer new shares for sale in five years, that doesn’t mean some sort of loop is formed. That’s a separate event. Wash trading aims to increase (apparent) market cap by creating trades through insincere activities.
- dvngnt_ 3y ago
  but you also realize there are major differences in terms of public disclosure
  - nico 3y ago
    Yes, I do realize that, and acknowledge it in my comments I’m not saying they are “the same thing” I’m saying the basic mechanism and potentially motivation is the same: They buy their own thing and make the price go up
- quickthrowman 3y ago
  > In both cases the original owners are buying their own assets in a public market and driving the price up No. In one case, someone is selling an NFT to themself. In the other case, a shareholder is selling an equity share to a corporation on a public market. Note that in the second case, the buyer and seller are different parties, which they are not in the NFT case, the NFT case is someone selling an asset they hold to themself.

nico 3y ago

> How are these even remotely similar? In both cases the original owners are buying their own assets in a public market and driving the price up You explained how they are also very different in the way they are done and regulated, but they are definitely more then “remotely similar” In the case of public companies, retiring really doesn’t mean anything. Just like they can retire the shares, they can issue and sell more. Of course as you pointed out it happens in a relatively transparent way and it’s regulated

function_seven 3y ago
> In both cases the original owners are buying their own assets No. In a share buyback, the company is buying assets from other people. In wash trading, the current owner is “selling” the assets to themselves. (Or they’re working with someone else to do a loop) And the retirement of these assets is different than the plan to sell them to another buyer.
- nico 3y ago
  It’s called buyback because the companies are buying back their own stock It’s akin to the loop you describe, they sell the stock to someone else, then they buy it back I’m aware the timing, the disclosures, the regulations, etc are different The mechanism is still the same, they buy their own thing to make the price go up
  - function_seven 3y ago
    The timing changes everything. In a wash sale I immediately churn the asset with successively higher “selling” prices. In a buyback, the sale was many years ago, to someone else in the market. That’s makes all the difference. Just like if I buy a share of AAPL in 2007, sell it in 2011, buy another one in 2015, and sell that one in 2023. I did absolutely no wash trading. I just entered and exited a position a couple of times. Buy backs are a one-way event. They’re not a loop for the purposes of artificially increasing market cap. If the company decides to offer new shares for sale in five years, that doesn’t mean some sort of loop is formed. That’s a separate event. Wash trading aims to increase (apparent) market cap by creating trades through insincere activities.
dvngnt_ 3y ago
but you also realize there are major differences in terms of public disclosure
- nico 3y ago
  Yes, I do realize that, and acknowledge it in my comments I’m not saying they are “the same thing” I’m saying the basic mechanism and potentially motivation is the same: They buy their own thing and make the price go up
quickthrowman 3y ago
> In both cases the original owners are buying their own assets in a public market and driving the price up No. In one case, someone is selling an NFT to themself. In the other case, a shareholder is selling an equity share to a corporation on a public market. Note that in the second case, the buyer and seller are different parties, which they are not in the NFT case, the NFT case is someone selling an asset they hold to themself.