How are stock buybacks any worse than dividend payouts to investors?
I get how they are logistically different, but to me, whether you give the investors cash that they use to buy more stock, or you internally increase the value of a stock by buying it back with company funds, the result is the same – Investors get richer at the cost of investment.
Not saying buybacks aren’t bad, but I guess I just don’t understand the hate relative to dividend payments.
In: 98
1. Buybacks make company’s share price go up arbitrarily. If the cash for the buyback came from the company’s profits? Cool! If the cash came from taxpayers? BOO!
2. Buybacks help the investor class increase their net worth and avoid taxes in a way that the working class usually can’t manage for themselves… Not at the same scale, anyway. Such things can only continue for so long before the guillotines come out.
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