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1. disgru+(OP)[view] [source] 2023-11-27 14:29:59
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.

replies(1): >>konsch+Ex1
2. konsch+Ex1[view] [source] 2023-11-27 21:24:05
>>disgru+(OP)
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.

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