3 ms·

What is your definition of "benefit"? Assuming a buyback increases share prices, why would shareholders in general be indifferent?

triceratops 1y ago
Because if I don't intend to sell right now, and the company is otherwise a healthy, going concern that can pay sustainable dividends, the actual share price is irrelevant to me. If anything, given my belief in the company, a lower share price is better. I can buy more shares!
- RandomLensman 1y ago
  If you ever want to sell, getting in the limit nothing for the shares might matter, no? There are other things: for example, share based M&A or compensation or other investors with different preferences - no relevance or interaction?
  - triceratops 1y ago
    > If you ever want to sell I already said that buybacks benefit sellers. > share based M&A or compensation All fair points. Share-based M&A can be good for investors. But if the stock price is going up because the company spent money on buybacks, then the company could also just pay cash for M&A and skip the buybacks. Higher compensation is good for employees who get paid stock and for upper management, who are nearly always paid largely in stock. There's an argument that's good for shareholders because of better retention. But if that were the case, why not just pay employees more cash?
    - RandomLensman 1y ago
      Are there many investors that are never sellers (that is different from selling soon-ish)? Paying cash could be quite different than paying in shares for M&A. If owning/using shares makes no difference to cash (whether to employees or in M&A situations), why not do buybacks then if there is no difference between cash and shares anyway?
- terminalshort 1y ago
  But you now own a larger percentage of the company because you own the same number of a smaller total number of shares outstanding, so you benefit whether you are a seller or a holder. If you intend to buy more it is neutral because the price per share goes up, but each share represents proportionally more.
- BurningFrog 1y ago
  Having been in the "don't intend to sell right now" situation for decades, the actual share price movements were always very relevant to me. I'm confident I share that psychology with almost everyone.
  - astrange 1y ago
    Stop looking. Well, "don't sell" is the wrong strategy anyway. Trade it in for an index fund.
    - BurningFrog 1y ago
      Can I do that without paying tax on my gains?
      - astrange 1y ago
        If you do it right when your RSUs vest you don't have gains. Or if you're a multimillionaire: https://www.bloomberg.com/news/features/2025-07-21/how-rich-investors-use-etfs-to-dodge-capital-gains-taxes https://www.bloomberg.com/news/features/2025-07-21/how-rich-...

triceratops 1y ago

Because if I don't intend to sell right now, and the company is otherwise a healthy, going concern that can pay sustainable dividends, the actual share price is irrelevant to me. If anything, given my belief in the company, a lower share price is better. I can buy more shares!

RandomLensman 1y ago
If you ever want to sell, getting in the limit nothing for the shares might matter, no? There are other things: for example, share based M&A or compensation or other investors with different preferences - no relevance or interaction?
- triceratops 1y ago
  > If you ever want to sell I already said that buybacks benefit sellers. > share based M&A or compensation All fair points. Share-based M&A can be good for investors. But if the stock price is going up because the company spent money on buybacks, then the company could also just pay cash for M&A and skip the buybacks. Higher compensation is good for employees who get paid stock and for upper management, who are nearly always paid largely in stock. There's an argument that's good for shareholders because of better retention. But if that were the case, why not just pay employees more cash?
  - RandomLensman 1y ago
    Are there many investors that are never sellers (that is different from selling soon-ish)? Paying cash could be quite different than paying in shares for M&A. If owning/using shares makes no difference to cash (whether to employees or in M&A situations), why not do buybacks then if there is no difference between cash and shares anyway?
terminalshort 1y ago
But you now own a larger percentage of the company because you own the same number of a smaller total number of shares outstanding, so you benefit whether you are a seller or a holder. If you intend to buy more it is neutral because the price per share goes up, but each share represents proportionally more.
BurningFrog 1y ago
Having been in the "don't intend to sell right now" situation for decades, the actual share price movements were always very relevant to me. I'm confident I share that psychology with almost everyone.
- astrange 1y ago
  Stop looking. Well, "don't sell" is the wrong strategy anyway. Trade it in for an index fund.
  - BurningFrog 1y ago
    Can I do that without paying tax on my gains?
    - astrange 1y ago
      If you do it right when your RSUs vest you don't have gains. Or if you're a multimillionaire: https://www.bloomberg.com/news/features/2025-07-21/how-rich-investors-use-etfs-to-dodge-capital-gains-taxes https://www.bloomberg.com/news/features/2025-07-21/how-rich-...