"Day Of Reckoning" Nears As Goldman Projects A Record $650BN In Stock Buybacks

Banjo · Feb 26, 2018

When it comes to stock buybacks - an increasingly politically charged topic - 2018 has already been a historic year: as we reported last weekendthe $171 billion in YTD stock buyback announcements is the most ever for this early in the year.

https://www.zerohedge.com/news/2018...the+survival+rate+for+everyone+drops+to+zero)

Scataphagos · Feb 26, 2018

Seems this might be the catalyst to propel the Dow to 50,000.

"... As 13-D reminds us, until the early 1980s, buybacks were illegal in the U.S. due to concerns executives would use them to manipulate share prices..."

Great. Used to be illegal. Now, standard practice.

d08 · Feb 26, 2018

Scataphagos said:
Seems this might be the catalyst to propel the Dow to 50,000.

"... As 13-D reminds us, until the early 1980s, buybacks were illegal in the U.S. due to concerns executives would use them to manipulate share prices..."

Great. Used to be illegal. Now, standard practice.

It should be so obviously illegal. Bonuses are often tied to stock price, they just use the company funds to prop up their own pay in a very lopsided way.
This might very well be what is keeping this market alive.

Scataphagos · Feb 26, 2018

With this "tax break" money, what might corporations do with it?

1. Improve quality of what they do with R&D expenditures.

2. Pass the tax savings along to shareholders in the form of dividends.

3. Expand their business to "create more".

4. Pass the tax savings along to employees in the way of bonuses and higher wages.

5. Use the money for buy-backs to boost share prices.

What do you think is most likely? (Considering, of course, that executives with stock options would benefit greatly/most from increased share prices....)

truetype · Feb 26, 2018

d08 said:
It should be so obviously illegal.

Should it also be illegal to conduct secondary offerings (the inverse of buybacks)?

d08 · Feb 26, 2018

truetype said:
Should it also be illegal to conduct secondary offerings (the inverse of buybacks)?

There's no conflict of interest in this sense with secondary offerings, unless you want to get fired.

kashirin · Feb 26, 2018

truetype said:
Should it also be illegal to conduct secondary offerings (the inverse of buybacks)?

it's interesting to compare sizes of initial and secondary offerings to buybacks
anyone know how to find it?

truetype · Feb 26, 2018

d08 said:
There's no conflict of interest in this sense with secondary offerings, unless you want to get fired.

So companies should be allowed to change their capital structure only if it's dilutive?

KevinD · Feb 26, 2018

d08 said:
It should be so obviously illegal. Bonuses are often tied to stock price, they just use the company funds to prop up their own pay in a very lopsided way.
This might very well be what is keeping this market alive.

Completely agree (and yes I do believe that is the marginal buyer).

Nine_Ender · Feb 27, 2018

Banjo said:
When it comes to stock buybacks - an increasingly politically charged topic - 2018 has already been a historic year: as we reported last weekendthe $171 billion in YTD stock buyback announcements is the most ever for this early in the year.

https://www.zerohedge.com/news/2018-02-25/day-reckoning-nears-goldman-projects-record-650bn-stock-buybacks?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+zerohedge/feed+(zero+hedge+-+on+a+long+enough+timeline,+the+survival+rate+for+everyone+drops+to+zero)

So a guy who got convicted of insider trading and kicked out of the industry is writing articles complaining about large companies legitimately buying back their own shares out of their massive profits ? Might confuse a few traders on here who believe a lot of shit about markets. Start another conspiracy theory about a very basic concept, cash for shares never goes out of style, it's how a publicly traded market works.