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…

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…