stonebluff

Where Have All the Buybacks Gone?

Has anyone tackled a study of the damage done by buybacks to American financial corporations? I cannot understand the rationale for buybacks except when the assets underlying the shares plainly exceed in value the price of the shares. Then, and only then, do the shrareholders as a group benefit. Buybacks otherwise benefit only EX shareholders, who sell into the buyback storm. With buybacks, management is making an investment decision with regard to my money; I would prefer to invest it myself. Give me cash dividends. I'll invest them where I choose. Buybacks carry even a mild odor of corruption, since managers with options are commonly large and regular vendors of their companies' shares, and buybacks tend to mask the dilution caused by prodigal use of options.,