zlacker

>>miohta+(OP)
Also:

"From 2001-2020, Intel blew $128 billion on buybacks (64% of net income) on top of paying out $68 billion as dividends (35% of net income),” notes Lazonick. That’s money that couldn’t go into innovation, retaining and training employees, R&D, and other critical areas.

https://www.ineteconomics.org/perspectives/blog/america-need...

>>miohta+w
>From 2001-2020, Intel blew $128 billion on buybacks (64% of net income)

Is that supposed to be a lot? Sure, hindsight is 20/20 and now we know they should have spent more on R&D, but what would be the correct amount? 50% 100%?

>>gruez+R4
"blew" isn't accurate because stock buybacks aren't spending money. That's kind of like saying contributing to an investment account is spending money.

You can sell the stock again, or use it for employee compensation.

>>astran+Nm
No, they are spending money, there is no substantial difference between dividends and buyback here since the companies issue their own stock, so they don't need to buy anything to sell it, they can try to get more money from investors in both cases.

Investment account analogy fails because you're not investing in your own ownership, so there is no "circular" relationship with yourself

>>eviks+dv
> since the companies issue their own stock, so they don't need to buy anything to sell it,

Public companies diluting shareholders generally causes people to flee for safer investments.

A company is not a person. It doesn't always own 100% of itself.

>>SR2Z+WK
Selling treasury stock has the same effect of diluting external shareholders, so the safety thing is the same - it depends on their assessment of the underlying reality.

And the person doesn't own himself, he is himself