Study: Buybacks Do Not Impede Long-term Growth [But…..]

A new study purports to show that stock buybacks do not impede long-term growth. Ira Kay and Blaine Martin conclude: Contrary to the common assertion that share buybacks damage long-term growth and investment, we found that companies conducting larger share buybacks (-12.8% change in common shares outstanding over four years) showed higher TSR, higher CapEx growth,…

Marco Rubio rolls out his own plan to limit stock buybacks – MarketWatch

Sen. Marco Rubio on Tuesday is rolling out his own plan to thwart stock buybacks, aligning with Democratic rivals who have recently condemned corporate stock repurchases as a source of the widening gap between average Americans and the wealthy. The Florida Republican and former presidential candidate, according to CNBC, would reduce the incentives for buybacks…

A Capitalist’s Solution to the Problem of Excessive Buybacks

VEA Vice Chair Nell Minow wrote about buybacks on the Harvard Law Forum on Corporate Governance and Financial Regulation:   We may not need a government solution to the issue of excessive corporate stock buybacks. We most certainly do not need the solution proposed by Senators Chuck Schumer and Bernie Sanders, requiring companies to adopt minimum…

VEA Vice Chair Nell Minow on Motley Fool Money — The Motley Fool

VEA Vice Chair Nell Minow appeared on the Motley Fool Money podcast to talk about stock buybacks and Amazon. Amazon rebuffs the Big Apple. Coke fizzles while Pepsi sparkles. And NVIDIA stops the bleeding. Analysts Andy Cross, Ron Gross, and Jason Moser discuss those stories and talk Activision Blizzard, Shopify, Restaurant Brands International, and UnderArmour….

The Investment That Cost Apple $9 Billion in 2018 – WSJ

VEA Vice Chair Nell Minow is quoted in this WSJ article about buybacks: Apple Inc. has lost more than $9 billion this year on an underperforming investment—its own stock.Like many large companies, Apple has used much of its windfall from the 2017 tax overhaul to buy back shares. But the recent plunge in stock prices…

Buyback Cannibalism Was the Final Death Blow to Sears

Would $6 billion in cash have kept Sears out of bankruptcy? It sure wouldn’t have hurt. Sears’ ability to stay in business is in doubt after the company filed for bankruptcy protection this month. Yet Sears spent $6 billion buying back its own shares since 2005 in a futile effort to help support its stock…

What Are Corporations Doing With That Tax Windfall?

We are big fans of Illinois Treasurer Michael Frerichs, and were very pleased to see his new report on how CEOs spent the extra money from the Trump tax cut. The theory and the promise was that this money would trickle down to employees, consumers, and investors, and that it would be used to improve…