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(CNBC)   While they've 'gifted' workers $1.50 and a Twinkie, corporations have have announced over $88 Billion in stock buybacks in just the last month   ( cnbc.com) divider line
    More: Obvious, Stock market, President Donald Trump, Wells Fargo, Donald Trump, Corporate buyback announcements, Stock, Share, buybacks  
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958 clicks; posted to Business » on 07 Feb 2018 at 2:35 PM (23 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



47 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2018-02-07 12:36:35 PM  
So darn much winning here.
 
2018-02-07 01:13:40 PM  
The tax bill dramatically cut the corporate tax rate - from 35 percent to 21 percent, and took aim at rules that had made it preferable for companies to stash foreign earnings overseas rather than spend them at home. Democratic lawmakers who have been critical of the GOP bill have claimed it would be used for such things as share buybacks to enrich shareholders, rather than for capital expenditures or improving worker pay.

I'm not surprised one bit by this.
 
2018-02-07 01:55:45 PM  
We told you they were gonna.
 
2018-02-07 02:18:42 PM  
Is America Great Yet?
 
2018-02-07 02:53:44 PM  
Gee, wonder where they got the money?
 
2018-02-07 02:58:45 PM  
They have have?

I don't believe believe you, Subby Subby.
 
2018-02-07 02:59:38 PM  

metaskie: Is America Great Yet?


Depends.  Are you an executive at Wells Fargo?
 
2018-02-07 03:28:13 PM  
Take heart though, fellow pauper cube drones. The excess capital in financial markets leads to increased difficulty in the search for yield.

/So we have that going for us, which is nice.
 
2018-02-07 03:41:27 PM  
 Well the true Trumpers are all highly invested in these stocks, so profit. Right?
 
2018-02-07 03:44:08 PM  
Damn. I used to get $8 and a candy bar when I got farked.
 
2018-02-07 03:44:25 PM  
Yeah, because $1000 and a pay raise is exactly the same as $1.50 and a Twinkie.

The complaints about this, you might recall, are from the same people who thought $10 a month was too much to pay for birth control pills.
 
2018-02-07 03:49:09 PM  

cirby: Yeah, because $1000 and a pay raise is exactly the same as $1.50 and a Twinkie.

The complaints about this, you might recall, are from the same people who thought $10 a month was too much to pay for birth control pills.


Well, is an extra $1.50 in your bi-monthly paychecks gonna get you a $10-a-month set of BC pills?
 
2018-02-07 03:59:50 PM  
OK, I'm gonna be the dumbass to ask this, 'cause I'm not an economist.

Isn't the money better sitting in the US stock market than a foreign bank? Don't we at least get a little love for our 401ks that way? Won't it at least now be subject to US capital gains tax when it's eventually sold?

Don't flame me bro, seriously axin' how this is worse than the alternative of all that money sitting overseas.
 
2018-02-07 04:15:04 PM  

dv-ous: We told you they were gonna.


shiat. They told you they were gonna. Here's the CEO of Wells Fargo:

"Is it our goal to increase return to our shareholders and do we have an excess amount of capital? The answer to both is, yes," Sloan said. "So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that."
 
2018-02-07 04:26:08 PM  
Cuts for working slobs sunset after the election cycle, but the the upper echelon ones don't. Enjoy your brief bread and circus, because you're about to take one in the ass. The whole circus, that is. But it's a good thing they all threw you a crumb first.
 
2018-02-07 04:27:37 PM  

SergeantObvious: OK, I'm gonna be the dumbass to ask this, 'cause I'm not an economist.

Isn't the money better sitting in the US stock market than a foreign bank? Don't we at least get a little love for our 401ks that way? Won't it at least now be subject to US capital gains tax when it's eventually sold?

Don't flame me bro, seriously axin' how this is worse than the alternative of all that money sitting overseas.


Sometimes a punch in the nose is slightly better than a kick in the balls, but I'd rather those not be my only choices, and I'll be damned if I'm going to be grateful to the motherfarker giving me those choices.
 
2018-02-07 04:33:37 PM  

Grand_Moff_Joseph: So darn much winning here.


Worst-timed Stock Buybacks Ever
 
2018-02-07 05:17:44 PM  
You're all whining now, but once it trickles down, won't you feel stupid! In fact, I fact, think I can feel the warm golden stream trickling all over me right now.
 
2018-02-07 05:55:33 PM  
I guess at least it's not like last time. George W. Bush admitted that he was duped that the repatriation would actually be invested in jobs and growth, rather than bonuses and buybacks. This time they didn't even bother lying about it.
 
2018-02-07 06:18:54 PM  

cirby: Yeah, because $1000 and a pay raise is exactly the same as $1.50 and a Twinkie.

The complaints about this, you might recall, are from the same people who thought $10 a month was too much to pay for birth control pills.


FAR FAR FAR FAR FAR FAR more people got an extra 1.50$ in their paycheck then a 1000$ bonus.  And most of the companies that were handing out bonuses were also laying off thousands of people in 'restructuring'.
 
2018-02-07 06:32:59 PM  

ColonelCathcart: Grand_Moff_Joseph: So darn much winning here.

Worst-timed Stock Buybacks Ever


"We won't have to worry about inflation as long as companies use tax cuts to buy infrastructure and hire people. Now if they use it for stock buybacks..." - Commentator on NPR yesterday.

Who would have thought they were actually going to use it to restructure the company?
 
2018-02-07 06:47:14 PM  
Even $1.50 and a Twinkie would be more than you would get from the Democrats.
 
2018-02-07 06:54:49 PM  

mrsleep: Even $1.50 and a Twinkie would be more than you would get from the Democrats.


Well geez, the Democrats better get right on passing a bill to fix that!

Oh, wait...
 
2018-02-07 07:00:31 PM  

mrsleep: Even $1.50 and a Twinkie would be more than you would get from the Democrats.


Writes a person who voted for a traitor.
 
2018-02-07 07:01:03 PM  

cirby: Yeah, because $1000 and a pay raise is exactly the same as $1.50 and a Twinkie.

The complaints about this, you might recall, are from the same people who thought $10 a month was too much to pay for birth control pills.


You are a piece of shiat.  The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Suck a dick.
 
2018-02-07 07:17:41 PM  
theflatline:
 The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Citation please
 
kab
2018-02-07 07:37:20 PM  
So how much of an impact on our beloved Dow do these buybacks have, and how long is that sustainable?
 
2018-02-07 07:39:46 PM  

sarek_smile: theflatline:
 The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Citation please


Walmart. farking Google it yourself. To qualify for the $1000, you had to have 20+ years. For $400, 10+ years. $250 for everyone else. $250 when your company literally will be saving probably 4 billion A YEAR in taxes. A farking disgrace.
 
2018-02-07 07:52:33 PM  

kab: So how much of an impact on our beloved Dow do these buybacks have, and how long is that sustainable?


Well, if your stock is having a really bad day, like Friday or Monday, and you were planning a buy-back anyway, you've got lots of money sitting around to prop the price back up, right?

Not like a company doing a buy-back has any reason to buy low, like most investors, right?
 
2018-02-07 08:08:15 PM  

SergeantObvious: OK, I'm gonna be the dumbass to ask this, 'cause I'm not an economist.

Isn't the money better sitting in the US stock market than a foreign bank? Don't we at least get a little love for our 401ks that way? Won't it at least now be subject to US capital gains tax when it's eventually sold?

Don't flame me bro, seriously axin' how this is worse than the alternative of all that money sitting overseas.


Yes.  Which is why getting rid of the repatriation tax was a very good thing.  But that has nothing to do with the rate cut.

The rate cut could have been a very good thing, too, if it were paired with the elimination of carve outs and loopholes in the corporate tax so the effective rate started the same, but there was way less avoision.
 
2018-02-07 08:58:33 PM  
$88 billion? Apple alone is talking $135 billion in buy-backs.
 
2018-02-07 08:59:32 PM  
I don't get the hate for stock buybacks. They are SUPPOSED to happen. Shares are not intended to be outstanding forever. The company issues them, pays dividends and eventually buys the shareholders out so they are not left holding the bag.

This notion of the eternally outstanding shares whose price has to keep ever increasing because the only "value" is on the secondary market is one of the major distortions of basic market capitalism. Sure, there's a secondary market for publicly owned securities but it has become an all-consuming beast that has pushed us into the modern era of MBAs running companies.

It's best for employment stability for companies to buy back shares as quickly as feasible so they don't have to satisfy the short term interests of whatever institutional shareholders happen to have the most shares that quarter.

As the labor market suffers supply shortages real wages are increasing and depressing share prices in anticipation of rising interest rates and bonds becoming more viable, which is a long-overdue rebalancing.
 
2018-02-07 09:02:50 PM  

BolloxReader: I don't get the hate for stock buybacks. They are SUPPOSED to happen. Shares are not intended to be outstanding forever. The company issues them, pays dividends and eventually buys the shareholders out so they are not left holding the bag.

This notion of the eternally outstanding shares whose price has to keep ever increasing because the only "value" is on the secondary market is one of the major distortions of basic market capitalism. Sure, there's a secondary market for publicly owned securities but it has become an all-consuming beast that has pushed us into the modern era of MBAs running companies.

It's best for employment stability for companies to buy back shares as quickly as feasible so they don't have to satisfy the short term interests of whatever institutional shareholders happen to have the most shares that quarter.

As the labor market suffers supply shortages real wages are increasing and depressing share prices in anticipation of rising interest rates and bonds becoming more viable, which is a long-overdue rebalancing.


SD you not know the difference between shares and bonds?
 
2018-02-07 09:55:28 PM  

jayphat: sarek_smile: theflatline:
 The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Citation please

Walmart. farking Google it yourself. To qualify for the $1000, you had to have 20+ years. For $400, 10+ years. $250 for everyone else. $250 when your company literally will be saving probably 4 billion A YEAR in taxes. A farking disgrace.


And don't forget, those amounts are before a 25% flat IRS tax on bonus checks, plus state/local income taxes, plus medicare and social security withholdings.
 
2018-02-07 11:40:42 PM  

hobbes0022: cirby: Yeah, because $1000 and a pay raise is exactly the same as $1.50 and a Twinkie.

The complaints about this, you might recall, are from the same people who thought $10 a month was too much to pay for birth control pills.

FAR FAR FAR FAR FAR FAR more people got an extra 1.50$ in their paycheck then a 1000$ bonus.  And most of the companies that were handing out bonuses were also laying off thousands of people in 'restructuring'.


Do we have a total on the value of the bonuses and raises given "because of" the tax cuts?  It would be nice too make a nice graphic to compare those dollars vs the 88 billion here.
 
2018-02-07 11:43:01 PM  

mrsleep: Even $1.50 and a Twinkie would be more than you would get from the Democrats.


Except for states run by Democrats have raised their minimum wage way higher.  Oregon's is due to go up to 15 in the next six years.

So wrong, it's less than people have actually gotten from Democrats.
 
2018-02-07 11:53:27 PM  

jayphat: sarek_smile: theflatline:
 The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Citation please

Walmart. farking Google it yourself. To qualify for the $1000, you had to have 20+ years. For $400, 10+ years. $250 for everyone else. $250 when your company literally will be saving probably 4 billion A YEAR in taxes. A farking disgrace.


As a Wal-Mart employee I can verify this.  Mind you, I will take any money someone wants to give me unexpectedly.  But I am getting something like $300 after working there for 9.5 years.  So it is a bonus of about 31 dollars per year or a pay increase if one-tenth of one cent per hour over those 9.5 years.  Most of us are very much aware that this is an attempt from the corporations to sell the tax cut to the working class.
 
2018-02-08 01:28:18 AM  
As predicted, and flat out stated by the corps themselves (yes, they're people).  So, tell me, now that the shares have popped, what are they going to do next year, and the year after, to show the same growth?  Because shareholders are hungry bastards, and now that they've had a taste, they want more.
 
2018-02-08 05:41:05 AM  
I have a couple of direct problems with share buybacks.

It artificially inflates EPS.  The less shares outstanding the better/easier it is to meet/beat analysts expectations.  Which mightbe used to hide underlying problems within the company while on the surface things look rosy.  Until they don't and the stock craters.

Share buybacks reduces liquidity in that particular stock.

Share buybacks can artificially inflate the price per share.  Same number of dollars chasing less shares, price goes up without a good underlying reason.

Share buybacks use funds that could have been used for debt service/reduction, raises, R&D or even M&A to help grow the company.

Indirectly; companies have been shown to have lousy timing and tend to buy high.  Instead of buying when you're hitting 52 week highs they should at least hold off and do buybacks when the market or your stock is tanking to buy cheap or shore up support.
 
2018-02-08 07:34:04 AM  
I asked for a 14% raise, since the company got a 14% tax cut.
It got a good laugh.
 
2018-02-08 07:37:13 AM  

SergeantObvious: OK, I'm gonna be the dumbass to ask this, 'cause I'm not an economist.

Isn't the money better sitting in the US stock market than a foreign bank? Don't we at least get a little love for our 401ks that way? Won't it at least now be subject to US capital gains tax when it's eventually sold?

Don't flame me bro, seriously axin' how this is worse than the alternative of all that money sitting overseas.


TLDR: Money spent on share buybacks is the lesser of two evils vs sitting in a bank.

Here is part of the problem.
U.S. companies have to pay corporate taxes on their profit but only when it is brought back to the U.S.
If it is held overseas it can be held over there untaxed.
It builds up unused not doing much of anything on its own.

Because of the low interest rates, companies could take out loans and buy back their shares using the overseas money as a sort of collateral. The company was obviously good to pay back the loan because they had cash sitting around. If you buy back and cancel out shares of stock that had say a 3% dividend, and your loan was 2%, you'd come out ahead.

When a company buys back and cancels out shares of stock, the number of owners goes down and the remaining owners get a bigger % of next years profits. Since companies report their success and failures on a per share basis, it looks like the company grew and became more profitable.
e.g. 1,000,000 shares earning $1,000,000 profit, the company has 1 earnings per share (EPS).
If you spend money to buy 50,000 shares leaving 950,000 left and still earning the same $1,000,000 total profit, the company now has 1.05 EPS. Companies can also pay the same dividend yet every share gets paid more.
Whoowho! The company is growing and paying a bigger dividend! Its time to buy more and push up the stock price!
It becomes a feedback loop and next year they will buy more and continue the cycle.

This is a great thing if you are an investor. You account is bigger and you get more income.
The company did not though increase sales, release a new product, open a new factory, hire more workers, pay taxes on all this activity, or any of the other benefits that society gains when a company grows. A very limited group gains all the benefits instead of everyone gaining something.

At face value yes it is better for money to be taxed and used for share repurchases vs sitting in a bank but only just barely.
 
2018-02-08 07:39:04 AM  

jayphat: sarek_smile: theflatline:
 The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Citation please

Walmart. farking Google it yourself. To qualify for the $1000, you had to have 20+ years. For $400, 10+ years. $250 for everyone else. $250 when your company literally will be saving probably 4 billion A YEAR in taxes. A farking disgrace.


smarted just for the "farking google it yourself"
Fark has become so damn lazy we have to be spoon fed everything.
 
2018-02-08 07:56:12 AM  
 

BolloxReader: I don't get the hate for stock buybacks. They are SUPPOSED to happen. Shares are not intended to be outstanding forever. The company issues them, pays dividends and eventually buys the shareholders out so they are not left holding the bag.

This notion of the eternally outstanding shares whose price has to keep ever increasing because the only "value" is on the secondary market is one of the major distortions of basic market capitalism. Sure, there's a secondary market for publicly owned securities but it has become an all-consuming beast that has pushed us into the modern era of MBAs running companies.

It's best for employment stability for companies to buy back shares as quickly as feasible so they don't have to satisfy the short term interests of whatever institutional shareholders happen to have the most shares that quarter.

As the labor market suffers supply shortages real wages are increasing and depressing share prices in anticipation of rising interest rates and bonds becoming more viable, which is a long-overdue rebalancing.


Somehow America grew without share repurchases because they werent even a thing until 1982, 10b-18 I dont see how they are a major distortion of capitalism as you claim.

Companies need to buy back shares as fast as possible to avoid short term interests from institutional investors? Just stop. You obviously have no idea what you are talking about. This is in fact the exact opposite.
 
2018-02-08 09:49:17 AM  

theflatline: cirby: Yeah, because $1000 and a pay raise is exactly the same as $1.50 and a Twinkie.

The complaints about this, you might recall, are from the same people who thought $10 a month was too much to pay for birth control pills.

You are a piece of shiat.  The companies that gave the "bonuses" based it on 20 years tenure.  It did not go to regular employees.

Suck a dick.


Sucking  dicks does lead to a cheaper form of birth control
 
2018-02-08 04:54:40 PM  

AlanMooresBeard: jayphat: 

smarted just for the "farking google it yourself"
Fark has become so damn lazy we have to be spoon fed everything.


The flatline stated that this 20-year threshold applied to "companies", while jayphat referenced a single company.
j
 
2018-02-08 09:58:20 PM  
if you have a 401k, IRA, pension, 529, or similar plan then stock buybacks and dividends directly benefit you
 
2018-02-08 11:11:50 PM  

Bearishlyphat: if you have a 401k, IRA, pension, 529, or similar plan then stock buybacks and dividends directly benefit you


They can in theory.  In practice, stock buybacks usually turn out really badly as far as return on capital goes.
 
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