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.
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Buybacks are often purchased with funds that could have otherwise been used to reinvest in or expand the company, or improve the wages of employees.
Recently, several companies have faced criticism for cutting back wages and laying off employees “due to the economy”, but then announced billion-dollar stock buyback proposals.
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