SOME GREAT POINTS Finance Professors Buybacks Done As Open Market Repurchases Should Be Banned

SOME GREAT POINTS !..... Finance Professors: Buybacks Done As Open-Market Repurchases Should Be Banned !

BigP 1792 Days

https://www.zerohedge.com/markets/finance-professors-buybacks-done-open-market-repurchases-should-be-banned

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BigP 1792 Days

The root cause of this concern is the trillions of dollars that major U.S. corporations have spent on open-market repurchases — aka “stock buybacks” — since the financial crisis a decade ago. In 2018 alone, with corporate profits bolstered by the Tax Cuts and Jobs Act of 2017, companies in the S&P 500 Index did a combined $806 billion in buybacks, about $200 billion more than the previous record set in 2007. The $370 billion in repurchases which these companies did in the first half of 2019 is on pace for total annual buybacks that are second only to 2018.

When companies do these buybacks, they deprive themselves of the liquidity that might help them cope when sales and profits decline in an economic downturn.

BigP 1792 Days

With the majority of their compensation coming from stock options and stock awards, senior corporate executives have used open-market repurchases to manipulate their companies’ stock prices to their own benefit and that of others who are in the business of timing the buying and selling of publicly listed shares. Buybacks enrich these opportunistic share sellers — investment bankers and hedge-fund managers as well as senior corporate executives — at the expense of employees, as well as continuing shareholders.

In contrast to buybacks, dividends provide a yield to all shareholders for, as the name says, holding shares

SOME GREAT POINTS !..... Finance Professors: Buybacks Done As Open-Market Repurchases Should Be Banned !

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