zlacker

Companies do share splits all the time.

Dividends also give money to people who have shares.

There is not difference beteeen these two mechanisms in who gets the money.

>>konsch+(OP)
Dividends are better because you don't have to sell to realize the gains. I'd love to own Google and Facebook and get dividends regularly.

>>disgru+B1
How is that better? With buybacks if I want to reinvest I don't have to pay taxes on them and if I want to realize the gains I can decide when to do that myself (of course seem more like an issue in Europe and with companies which only payout yearly).

>>qwytw+d6
Because it encourages longer-term ownership, and gives shareholders a stake in the future cash flows of the business.

Like I said, it's the tax treatment that basically stopped growth companies giving dividends. I think that we should change said tax treatment and also make buybacks illegal but that's a bit more controversial.

In any case, for both G and FB, they'd need to do buybacks anyway because of their employee share programs.

>>disgru+Rr
Buybacks have the same effect of encouraging long-term ownership.

Given a certain amount of money, spending it on stock buybacks vs spending it on dividends returns the same amount of money to each HOLDING shareholder.

In one case, they receive a small sum. In the other case, the value of their stock goes up.