> I never understood the anti-dividend and anti-buyback mindset. I'll try to explain it. Companies use stock buybacks to give away massive amounts of capital.

> I never understood the anti-dividend and anti-buyback mindset. I'll try to explain it. Companies use stock buybacks to give away massive amounts of capital. Capital that they clearly need for their long term health. Then, because they're important to the economy when they have a downturn they come to taxpayers and ask for massive amounts of cash. This is for example what happened to the airlines which then got over $50 billion or so in bailouts. They spent about 80% of that in the previous few years on stock buybacks. They would have been healthy enough to survive without the bailouts. So what happens is companies give their money away to the rich, constantly fail because of that, and take money away from the poor to cover up for their failure. Stock buybacks create a conflict of interest where companies can directly manipulate their stock prices. So instead of building the best enterprise, they can pump money into bringing their stock up artificially. The fact that this overt manipulation of your own stock price is bad was well understood after the Great Depression and that's why it was basically banned by the act that set up the SEC in 1934. The SEC then passed Rule 10b-18 granting companies an exception from the market manipulation rules under Reagan. That's a pretty clear case of a regulatory agency going against the will of Congress to create basically its own law. It will be interesting to see what happens to Rule 10b-18 if the Supreme Court reverses Chevron in a few months. > The new CEO banned buybacks. Of course. After 20 years of stock buybacks where they gave away the vast majority of their cash the new CEO wants money from the CHIPS act which says they cannot have buybacks for 5 years. It will also be interesting to see if the CHIPS act has any teeth. BAE took the money but is doing buybacks anyway. This is too long of a topic for an HN post. Here's a nice and balanced writeup https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639389 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639389 My personal position is far more extreme, there should be a clear ban and the SEC should not be allowed to overturn the law as it was written with a regulation. Certainly if the EPA cannot regulate carbon through the same logic, the SEC should not be allowed to do so. If you want a gentler writeup, this HBR article has it. https://hbr.org/2014/09/profits-without-prosperity https://hbr.org/2014/09/profits-without-prosperity