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(CNN)   Corporate stock buybacks curiously coinciding with executives selling off huge amounts of their own shares. Party in the front, business in the back   ( money.cnn.com) divider line
    More: Murica, Stock market, Dow Jones, Dow Jones Industrial Average, Dow Jones Indices, S&P Dow Jones, Jones Indices LLC, buybacks, insider selling  
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1127 clicks; posted to Business » on 18 Jul 2018 at 1:32 AM (13 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2018-07-18 12:41:45 AM  
We are the NPCs in a rich person's game
 
2018-07-18 01:46:09 AM  

SoupGuru: We are the NPCs in a rich person's game


[realm chat]: FU noob , MGAGA!
/shoots at NPC to be befuddled at the lack of damage it took and why the village guards are attacking me
 
2018-07-18 01:59:20 AM  
Don't worry guys, the government will step in if anything shady is happening. How can anyone not have full confidence in the upkeep of ethics by this administration?
 
2018-07-18 02:10:28 AM  
I recently learned stock buybacks used to be illegal. Maybe, just maybe there was a good reason for that?
 
2018-07-18 02:27:39 AM  
I thought the spike in buybacks was expected and understood. Companies have been hoarding tons of cash in overseas shell entities, and just got a great deal on repatriation taxes. As before, most didn't have a pressing need for the money, and they're certainly not going to waste it on employees. So it's mostly buybacks, with a little bit of special or increased dividends. Did I miss it, or did TFA leave that out entirely?

They also quoted a guy who prefers dividends because despite the tax hit those have, 'at least stockholders can decide what to do with the money'. But if buybacks increase (or prevent decrease) share prices, stockholders are still deciding to let it ride, or pay the tax and buy that car, pay tuition, survive cancer, whatever. Maybe the buyback to share price connection is not as certain as a direct dividend. But dividends take away the tax decision from the shareholder.
 
2018-07-18 04:31:55 AM  
It's called a pump n dump.
 
2018-07-18 04:41:01 AM  
Same as it ever was.
 
2018-07-18 04:45:03 AM  
Bunch of greedy cowards. Why do you need to extract so much personal wealth from the system while supporting the most unqualified man in America to run the country? Is it worth destroying the country to get an auto-pen? Payback is a biatch.
 
2018-07-18 04:47:09 AM  
Finally, those CEOs are getting their due. Now it can start to trickle down to the rest of us,
Any day now.
 
2018-07-18 06:01:43 AM  
Two independent events that may or may not be related. Insider selling events could be caused by a number of things. Yes, the C-Suite could be taking advantage. But on the other hand, it could signal a lack of confidence in the future of either the firm or their industry.

The bubble walls are getting thinner.
 
2018-07-18 06:50:43 AM  
Eh, the rich gonna rich.

It's the idiots worshiping them like gods who have no excuse.  I sure wasn't the one who gave psychopaths the keys to the country.
 
2018-07-18 07:05:32 AM  

SoupGuru: We are the NPCs in a rich person's game


Your dreams of a secure middle class lifestyle are in another castle.
 
2018-07-18 07:33:23 AM  

OccamsWhiskers: They also quoted a guy who prefers dividends because despite the tax hit those have, 'at least stockholders can decide what to do with the money'. But if buybacks increase (or prevent decrease) share prices, stockholders are still deciding to let it ride, or pay the tax and buy that car, pay tuition, survive cancer, whatever. Maybe the buyback to share price connection is not as certain as a direct dividend. But dividends take away the tax decision from the shareholder.


Buybacks are bad because companies are worse at market timing than people.
 
2018-07-18 08:03:47 AM  
The biggest beneficiaries of buybacks are people with stock options, because buybacks temporarily and artificially prop up the stock price, allowing the people with options to exercise and sell at a better price than the market would otherwise allow.

Now, I wonder who might possibly be the people with most stock options?
 
2018-07-18 08:15:17 AM  
And the system isn't rigged is it?
 
2018-07-18 08:45:04 AM  
So the company gets lower taxes, uses the increased funds to buy back stock while the higher ups use the increased market price to sell their own stock thus gaining millions while in no real way helping the economy or lower classes. Did I miss anything and is anyone surprised?
 
2018-07-18 09:04:13 AM  

Anenu: So the company gets lower taxes, uses the increased funds to buy back stock while the higher ups use the increased market price to sell their own stock thus gaining millions while in no real way helping the economy or lower classes. Did I miss anything and is anyone surprised?


Nope, and nope.
 
2018-07-18 11:03:38 AM  
FTA: "The buyback boom has been viewed by investors as a sign of confidence among CEOs. "

Bullshiat. Buybacks are the lazy way to raise EPS year over year and look like you did something. They can be great when timed right when a company's share price is low. But more often than not it isn't.
 
2018-07-18 11:56:00 AM  

AlanMooresBeard: FTA: "The buyback boom has been viewed by investors as a sign of confidence among CEOs. "

Bullshiat. Buybacks are the lazy way to raise EPS year over year and look like you did something. They can be great when timed right when a company's share price is low. But more often than not it isn't.


The director of securities for a major bank told me the same thing on a date.
 
2018-07-19 09:23:28 AM  

czetie: The biggest beneficiaries of buybacks are people with stock options, because buybacks temporarily and artificially prop up the stock price, allowing the people with options to exercise and sell at a better price than the market would otherwise allow.

Now, I wonder who might possibly be the people with most stock options?


Yes and no.  If you look at the volume of a stock that's moving, you can tell if the price is going up because it looks hot (and some buyers are just dumb and look at price trend only when buying), or if it's actually rarifying in the market.

As long as you keep in mind that the purpose of all excess cash moves in a publicly traded corporation are made to increase shareholder value, you're likely to make good decisions.  It's not an altruistic system.  Top leaders in companies have a lot of stock because their employer (the BoD) wants them to have a personal stake in that company's value.  They do well, you do well.  They tank, your net worth takes it in the groin.

Doesn't lead to the most healthy behavior, of course.  Often downright terrible.  But you can plan around it if you keep their intentions straight in your mind.
 
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