Monday, March 6, 2023

The Debate Surrounding Share Buybacks

Share Buybacks
https://www.theatlantic.com/magazine/archive/2019/08/the-stock-buyback-swindle/592774/
 
Financial engineering is replacing real engineering by Satyajit Das
http://forbesindia.com/article/column/financial-engineering-is-replacing-real-engineering/43343/0
“In reality, share buybacks, etc., boost the stock price by increasing EPS. In the US, buybacks have added around $2 a share to earnings on the S&P 500 index. Given that the firm’s underlying operating performance is unaffected, it is merely financial engineering that does not alter the company’s value. A primary motivation is enhancing the remuneration of senior managers, where stocks and options may constitute as much as 80 percent of the total