[wronglebowski]

What's the argument for stock buyback programs generally? We have more cash than we know how to spend reasonably?

[bern4444]

It's like a tax free dividend. Dividends are taxable but if a company uses the cash they would have spent on a dividend on a buy back there's no taxable event for the investors. Those investors who want the cash can sell and pay the tax and the rest enjoy the higher share price

[musicale]

Incentivizing short-term investors to dump stock by boosting the price temporarily? I guess that's a strategy.

[tbrownaw]

Yes.

If you have more money than you're able to make good use of improving the company (r&d, acquisitions, new locations, whatever), you can give it back to investors. Which can be either a dividend or a buyback, and in theory (ie, ignoring pesky details like taxes) those are supposed to be equivalent.

[JackFr]

An enterprise can be financed with debt or equity. Issuing debt to buy back shares is simply changing the capital structure of the firm.

It lacks a moral component.

[cortesoft]

It can also be that the company leadership thinks the stock is undervalued.

[andrekandre]

  > We have more cash than we know how to spend reasonably?

literally all kinds of things could be done...

- pay your workers a good bonus?

- invest the money in the market?

- lower prices?

  > What's the argument for stock buyback programs generally?

they used to be illegal because its a form of stock price manipulation*

* https://www.forbes.com/sites/aalsin/2017/02/28/shareholders-...

[dehrmann]

> invest the money in the market?

Unless you're Berkshire, most investors don't want this. They buy a company for its success in widgetry. If they wanted to pay someone to invest in the market, they'd buy an actively managed fund.

[nradov]

That's silly. It's a business, not a charity. When I'm a shareholder in a business I don't want management wasting my capital by investing it in the stock market when they run out of growth opportunities. Just give me the cash back (preferably in the form of stock buy backs) and then I can invest that cash in other businesses myself.

[musicale]

> Give shareholders the right to vote on buybacks.

I like the idea of giving long-term shareholders an easier way to weigh in on buybacks.