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As has been pointed out elsewhere, buybacks are morally equivalent to shareholder dividends; the only effective difference is the tax treatment. If you think r
by stickfigure 1y ago
As has been pointed out elsewhere, buybacks are morally equivalent to shareholder dividends; the only effective difference is the tax treatment.
If you think returning money to investors is bad, I have to ask: Why would anyone invest in the first place?
- shortrounddev2 1y agoIf the only difference is how much of the profit is socialized vs privatized, then they are not morally equivalent
- stickfigure 1y ago> how much of the profit is socialized vs privatized What does that phrase even mean? It's nonsensical. Whether via buybacks or dividends, money goes from the corporation to its investors. That's why investors invest.
- beambot 1y agoForced liquidity and the tax implications can absolutely be bad for investors. If my option is a 5% dividend or a 5% share buy-back, the net-of-taxes benefit of the 5% dividend is 15%-20% less due to capital gains taxes than the share buy-back. The effect with annual compounding over many years is quite material...