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
Not sure that qualifies as an ELI5 question.
You said it yourself, they’re litterally the same thing, returning cash to investors, typically when you have no good investment opportunity left.
They only have bad reputation because it’s internet and people love commenting on things they don’t understand.
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