Stock buybacks....so much...

[rambot]

Stock buybacks! Helping Americans?

Well helping rich Americans. Yes they could be giving that money to employees, they could be managing prices better. But nope.
Why?

GM announces record $10 billion stock buyback—more than it’s spending on UAW raises—as its electrification push stalls
Cigna does the same.
It seems any given week billions of dollars suddenly exist and get socked away in the dragon hordes instead of given to people who will spend it to survive.


Enriching stock holders is more important than customers or employees.

 

[Laodicean60]

Stock buybacks! Helping Americans?

Only those who are in the stock markets and one's holding retirement accounts. I feel it's price manipulation and personally don't like it. That is a good question and I'll have to look that up. I assume most lower middle class may not have jobs that offer 401k.

 

[Arcangl86]

Only those who are in the stock markets and one's holding retirement accounts. I feel it's price manipulation and personally don't like it. That is a good question and I'll have to look that up. I assume most lower middle class may not have jobs that offer 401k.

It's actually interesting. A surprisingly large amount of Americans own stock. About 62% of American adults hold stock. But there are two pretty big caveats to that. Only about 25% of American adults directly hold stock. The other 40ish% is through mutual funds and IRAs. And stock buybacks are great for increasing stock prices at a particular point of time, but that's only beneficial to an IRA holder if they are at or near retirement. The more important caveat is how much stock people own. It's similar to wealth dispersity in general. The top 10% of people own 88.6% of the stock, while the bottom 50% only own .6% of the stock. The combination of limited liquidity for those who don't directly own stock and the massive disparity in the value of stock own means that this is only going to significantly benefit a very small amount of people.

 

[NxNW]

Stock buybacks! Helping Americans?

It seems any given week billions of dollars suddenly exist and get socked away in the dragon hordes instead of given to people who will spend it to survive.

Why should money just be given away?

Enriching stock holders is more important than customers or employees.

Everybody works for somebody.

 

[variant]

It's actually interesting. A surprisingly large amount of Americans own stock. About 62% of American adults hold stock. But there are two pretty big caveats to that. Only about 25% of American adults directly hold stock. The other 40ish% is through mutual funds and IRAs. And stock buybacks are great for increasing stock prices at a particular point of time, but that's only beneficial to an IRA holder if they are at or near retirement. The more important caveat is how much stock people own. It's similar to wealth dispersity in general. The top 10% of people own 88.6% of the stock, while the bottom 50% only own .6% of the stock. The combination of limited liquidity for those who don't directly own stock and the massive disparity in the value of stock own means that this is only going to significantly benefit a very small amount of people.

It's nice that corporations take care of their stockholders given that the largest holders are already very rich.

However, it would be better if the companies were reinvesting their profits into money making endeavors both for the company and the economy at large.

 

[jayem]

However, it would be better if the companies were reinvesting their profits into money making endeavors both for the company and the economy at large.

That could happen—at least in theory. All publicly-held corporations have annual shareholder’s meetings. Even if you own just a single share, you have the right to attend the meeting and vote for the board of directors. If a majority of shareholders decide to make their voices heard, and to consolidate their votes, the company’s entire management—the CEO, and the directors—can be replaced with people agreeable to a different business model. True, a shareholder’s revolt is highly unlikely to occur, but it’s not impossible.

 

[variant]

That could happen—at least in theory. All publicly-held corporations have annual shareholder’s meetings. Even if you own just a single share, you have the right to attend the meeting and vote for the board of directors. If a majority of shareholders decide to make their voices heard, and to consolidate their votes, the company’s entire management—the CEO, and the directors—can be replaced with people agreeable to a different business model. True, a shareholder’s revolt is highly unlikely to occur, but it’s not impossible.

It sounds a lot more democratic than it really is as you get the number of votes that you have shares. I've never heard of a shareholder revolt over stock buy backs either.

However, the idea of investing into growth isn't unheard of, a lot of companies simply do so as a matter of best practices.