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…

Buyback Binge That’s Besting Capex Pays Off Big (FOR NOW) in U.S. Stocks

The biggest use of cash among S&P 500 companies is making their public footprints smaller — a strategy that’s paid dividends in 2018.According to Goldman Sachs, aggregate share repurchases (or buybacks) rose by nearly 50 percent to $384 billion in the first half of 2018. That tops the $341 billion spent on capital expenditures, which…

Buybacks: Short-term Boost vs. Long-Term Shareholder Value — As You Sow

We highly recommend this excellent report from As You Sow on buybacks. We share their concern about this poorly timed diversion of corporate assets for short-term gains. An excerpt below (emphasis ours): When a company has too much cash its executives and directors puzzle the question: What should we do with the money? Should we…

‘Eye-popping’ payouts for CEOs follow Trump’s tax cuts – POLITICO

Some of the biggest winners from President Donald Trump’s new tax law are corporate executives who have reaped gains as their companies buy back a record amount of stock, a practice that rewards shareholders by boosting the value of existing shares.A POLITICO review of data disclosed in Securities and Exchange Commission filings shows the executives,…

Are Stock Buybacks Starving the Economy?  – The Atlantic

Stock buybacks are eating the world. The once illegal practice of companies purchasing their own shares is pulling money away from employee compensation, research and development, and other corporate priorities—with potentially sweeping effects on business dynamism, income and wealth inequality, working-class economic stagnation, and the country’s growth rate. Evidence for that conclusion comes from a…

Roosevelt Institute Calls on Walmart to Redirect Buyback Cash to Wages

Roosevelt Institute’s new report is Making the Case: How Ending Walmart’s Stock Buyback Program would Help to Fix our High-Profit, Low-Wage Economy. Walmart—as our country’s largest retailer and the largest private employer of women and black and Latinx workers—is a tremendous force in our economy. Today, however, the starting wage its associates earn still falls…