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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I’d imagine that’s because a stock holder cannot really gain any personal benefit from a stock buyback unless they sell their stock, whereas from a dividend they gain the benefit without having to divest from the company.
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