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> ASML also announced a new share buyback programme of up to €12 billion, to be executed by 31 December 2028. Oh boy. This fills me with dread. I've never seen
by noosphr 9mo ago
> ASML also announced a new share buyback programme of up to €12 billion, to be executed by 31 December 2028.
Oh boy. This fills me with dread. I've never seen a company that starts doing buybacks not become a financialized hollow shell within a decade. Being an irreplaceable monopoly on the commanding heights of the digital economy makes this even worse.
- stingraycharles 9mo agoIt's a signal that the finance people are becoming more important to the company, but not necessarily a bad thing; it's effectively a more (tax) efficient form of dividends, which isn't very controversial. ASML is a fairly old company (40+ years), and they have been doing share buybacks since 2006: https://www.asml.com/en/investors/why-invest-in-asml/share-buyback https://www.asml.com/en/investors/why-invest-in-asml/share-b...
- tehmillhouse 9mo agoEvery time I can remember that the finance people have become more important to a company, it has led to the disappearance of the internal culture geared towards excellence that got a company to that point in the first place.
- Cthulhu_ 9mo agoThat's what they're afraid of, and that's one of the reasons why they're doing the big management reorganization - too many managers leads to lots of overhead instead of excellence.
- repelsteeltje 9mo agoI guess it's simply the externalities issue. Finance people optimize finance, which among other things results in improved efficiency. But despite best intentions to map out all incentives that matter, it always fails to consider some aspects. Focusing on short-term profits, ignoring privacy, security or pollution because it's free, lobbying for favourable legislation that hampers competitors, etc. These are things that don't show in a spreadsheet unless you're explicitly incentivized to look at them. But that's never the case because the number of KPIs is always finite while there are infinitely many aspects that could potentially be subverted.
- Gud 9mo agoWhy does "optimizing finance" improve the efficiency in an engineering company? Seems to me like "optimizing finance" could be absolutely detrimental for the bottom line.
- repelsteeltje 9mo agoI guess I meant to say: "finance people optimize the company 's financials"
- stingraycharles 9mo agoIt’s largely true. I believe Steve Jobs had some talk about this phenomenon; basically, at some point, the scale of an organization means the product people make less of an impact than the sales / finance people, and they slowly take over. Then over the span of a few decades, what’s left is a shallow organization without real innovation. Intel and Boeing are good examples of this.
- askvictor 9mo agoAnd, indeed, Apple.
- hayvan 9mo agoIndeed, finance people becomeing important is how you get 737-MAX disasters.
- jorvi 9mo agoBut both dividends and stock buybacks are terrible and really shouldn't exist. In a proper market, competition is so fierce that you cannot afford dividends / stock buybacks because your competitors will put all their money towards R&D and retaining & attracting the best personnel. Then again, this has been going on for decades. Businesses used to be about being the best for your customers and personnel. But it's all become about sticking it to everyone for the benefit of the shareholders.
- tonyedgecombe 9mo agoWhy would anybody invest in a business that never produces a return?
- lotsofpulp 9mo agoIdeally, people wouldn’t have any money to invest because they all earn the same amount, which they all spend on the same expenses, otherwise it gets taxed and redistributed.
- tonyedgecombe 9mo agoWhich is incoherent as it works against human nature.
- jorvi 9mo agoThe return is in the increase in value of the stock? Dividends have only existed since the 1960s and stock buybacks only became mainstream in the 1980s. Stocks have existed in some form since the 1600s.
- blibble 9mo agoyou realise most companies are private and don't have publicly tradable shares? very common: a small company with a couple shareholders of that aren't employees without dividends, how can the shareholders get THEIR profits out of THEIR company, without giving up control? just leave them in there forever?
- londons_explore 9mo agoIt's a European company. They run a bit different.
- whazor 9mo agoASML did two extremely big bets on the future. Both futures are now.
- Cthulhu_ 9mo agoAnd they can look forward too, their order book has tens of billions in there for the coming years. And that's orders, on top of that comes the maintenance and support for all the machines in operation - in 2023 they delivered 449 machines (not just their top of the line stuff), which means that there's thousands of machines in operation requiring regular maintenance etc. ASML's bet paid off and for now at least their business is very sustainable.
- abigail95 9mo agoIt's a mechanism to distribute profits to shareholders. Do you invest in companies that don't distribute profits - does this get you some kind of higher return?
- ygouzerh 9mo agoFrom the company perspective, performing buyback when market is high is just throwing cash by the windows to over-priced shares. If they wanted to distribute cash, they could just use dividends
- MattGaiser 9mo agoDividends are taxed. No company is going to argue they are overvalued either.
- kachnuv_ocasek 9mo agoOne could argue share buybacks are more tax-efficient.
- eru 9mo agoBuybacks and dividends are economically equivalent. They mostly differ in tax treatment.
- deleted 9mo ago[deleted]
- petters 9mo agoThis makes no sense. Buybacks and dividends are how companies give money to investors
- disgruntledphd2 9mo ago> This makes no sense. Buybacks and dividends are how companies give money to investors Dividends are totally fine (from my perspective), while. buybacks are problematic from a place where executives are bonused on share price and earnings per share, both of which can be manipulated by buybacks. More philosophically, I think that dividends are better for society as they allow investors to realise a stream of value from well run companies rather than needing to sell their share to acquire this value. This is obviously just my opinion though, I don't know if it matches to what the OP cares about.
- rocqua 9mo agoWhy does it matter if people have to sell their shares to unlock value? Is it just the friction of small orders? Buybacks for manipulating share prices and earnings per share are indeed silly. But they should also be trivial to compensate for by normalising on market cap instead of a single share.
- bandrami 9mo agoNotionally there's not a difference between dividends and buybacks. (That's somebody's theorem... Modigliani maybe?) The fact that our tax laws treat them so differently doesn't make much sense.
- timmg 9mo ago> Dividends are totally fine (from my perspective) FWIW, companies are now opting for buybacks because it is more "tax efficient". Stockholders have to pay taxes on dividends (immediately) but only pay capital gains on share price increases and only when they sell.
- disgruntledphd2 9mo ago
- burnt-resistor 9mo agoYup. If CEO and C-suite TC go up, then it's a lawn dart screaming towards Earth.
- xbmcuser 9mo agoTheir major revenue growth potential was blocked by the US for the previous gen systems. Whereas newer gen is so expensive that its biggest customer TSMC is trying to do without. So cutting expenses and share buy backs is the way for major stock holders to decrease their positions without share prices tanking.
- ArtTimeInvestor 9mo agoI've never seen a company that ... You have not seen Alphabet, Apple, Microsoft? Where are you looking? They all did tens of billions of share buybacks every year for many years now. Example: Alphabet has started share buybacks in 2015 and increased those every year. $70B in 2025 alone. And they are firing on all cylinders product-wise.
- noosphr 9mo agoI'm happy you made my point for me.
- Rastonbury 9mo agoI'm not sure what the point is wrt ASML, they made good bets, they won their monopoly, their shareholders who funded the bets get to enjoy monopoly pricing. If they start cutting R&D and lose their crown, yes it's shame I guess but that's all there is. To expect a company to sell their goods cheaply when they are the only ones in the world who can them is asking for too much. It's great that they and their investors took the punt on EUV all those years ago, we probably would not have the chips we have today and all the economic benefits around it
- anonymous908213 9mo agoHas anyone in the last 10 years praised Google for anything, ever? They've been engaged in enshittification the entire time. Search is getting worse, Youtube is getting worse, Android is getting worse, Chrome is getting worse. They are indeed a hollow shell of the company that originally established themselves, but now that they have such a wide-ranging monopoly they can freely debase the value of their products to extract as much from customers as they can.
- apexalpha 9mo agoWhen you say "worse" shareholders will say: "globally dominant in multiple platforms". Sure Android might be worse from a pure Linux perspective, but what shareholder has ever cared about that.
- rocqua 9mo agoA buyback is almost the same as a dividend, with minor differences around tax and effects on derivative pricing. And ASML has been paying out a dividend for a long time.
- thrance 9mo agoBuybacks should be illegal again. They're like drugs for companies, they can't help but do them and divest capital that would help them thrive and put it into their shareholders' pockets.
- philipallstar 9mo agoOf course they can. Issuing shares and going public is the exact opposite of that and they do that all the time.
- alecco 9mo agoThat money would be better spent in R&D, investing, or acquisitions. Why.