Why Apple, Warren Buffett, And Others Use Stock Buybacks

Companies like Apple and Walmart purchase outstanding shares of their own stock in a practice known as buybacks. Over the last year there's been an increase in politicians questioning buybacks and whom they actually benefit.
In December 2017 President Donald Trump signed the GOP tax cut, which took effect the next month and lowered corporate tax rates from 35 percent to 21 percent.
The bill was supposed to spur corporations to reinvest those savings back into their own companies, thus creating jobs and employment opportunities and allow companies to pay higher salaries.
Many businesses spent more on internal projects, at least initially. But business investment slowed later in the year, as concerns about the economy grew.
At the same time, companies used their cash to buy back a record $1.1 trillion worth of their own shares, leading Democrats to propose legislation limiting buybacks unless companies raise their minimum wage to $15 and agree to other employee benefits.
Republicans like Senator Marco Rubio have suggested raising the capital gains rate to discourage buybacks.
SEC Commissioner Robert Jackson Jr. recently expressed his belief that most buybacks are better for executives than for shareholders. And that could give new momentum for the Securities and Exchange Commission to change the rules.
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Why Apple, Warren Buffett, And Others Use Stock Buybacks

[@susannnico]

This is financial advice and I never give financial advice: DONT LEAVE DURING THE BEAR. If you don’t want to invest…learn. If you don’t want to learn…build. If you don’t want to build observe. DO SOMETHING…other than leave. There is so much opportunity here. Take advantage!

[@lailaalfaddil7389]

It took me 3 years to stop trying to predict what's about to happen in the market based on charts studying because you never know. Please, i need the help of your Investment advisor.

[@susannnico]

*ROCHELLE DUNGCA-SCHREIBER* is my portfolio-coach, I found her on Bloomberg where she was featured, I looked up her name on the internet. Fortunately I came across her site and reached out to her, you can verify her yourself.

[@lailaalfaddil7389]

God bless you for sharing!

[@raymondbarnes5264]

Investing in the stock market is the best option to make a passive income. Virtually all the markets are crazy, most people pay more attention to the shiniest position on the graph, I’m keeping a diversified portfolio.

[@danielkey1463]

To manage investment risk, consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal.

[@raymondbarnes5264]

@@danielkey1463Remember, diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. Because investing can be complicated, consider working with a financial professional to help guide you on your wealth-building journey.

[@greenquake11931]

@@raymondbarnes5264 who would you endorse? I've been in the shadows for too long.

[@raymondbarnes5264]

@@greenquake11931 My consultant is 'MARGARET ANN WARNKEN" , she provides the entry and exit points on the securities I focus on. You can look her up online with her name if you care about supervision. I follow her trade pattern and haven’t regretted doing so.

[@greenquake11931]

@@raymondbarnes5264 Thank you so much! Found her webpage and left a message. Hopefully, she responds.

[@lucasng9617]

CNBC videos about business and economics are getting better and better! Nice job. As the video described, the buyback is a very biased decision when executives own stock. They are practically transferring income to themselves by boosting prices and taking that opportunity to sell their stock. Using company resources to increase their gains. It seems that the dividends should increase for the shareholders that don't sell into buyback, so that could play a role too.

[@Contrarianthinker581]

great point here

[@nobody.123]

This is relatively uncommon these days, It's not the 90's anymore haha, it's not that easy. Don't get me wrong, I'm not a fan of buy-backs, but the practice of CEO'S buying back their stock prior to getting their bonus is not a problem in most reputable firms. The issue of buy backs today is really the use of cash flow for buying paper rather than building factories, it's not a long term approach to growth, but more "attractive" to some investors. There's a big difference between that, and CEO's "transferring" company cash flow back into their pockets.

[@bryanzarate2602]

They are getting better because more people watch when they make videos like this. It’s always, always about profit for a corporation.

[@FOODREVOLUTION360]

I agree.

[@FOODREVOLUTION360]

I agree.

[@RonVillejoConsulting]

Lesson learned: When corporations buy back their own stock, it's a signal for investors and regulators alike to investigate. It may signal a healthy cash flow, or it may mask an underlying problem.

[@bwing411]

Ron Villejo not a bad idea, but the problem is it works so well that many healthy companies will follow suit. Making it difficult to tell who is struggling

[@SpaceTravel1776]

And if an investigation found they were doing a buyback for the completely wrong reasons, nothing would happen because buybacks aren’t illegal. What a misguided, oversimplistic, and bureaucratic solution you presented. May god have mercy on your soul.

[@Atombender]

Stock buybacks used to be considered insider trading and therefore illegal. The Reagan administration changed that policy in 1982.

[@DawnPatrol101]

LOL

[@sor3999]

Yet another thing we can blame Reagan on. Good stuff.

[@yugiohpokemon5285]

@Ionor Rea's Tech Evolution Archive how is reinvesting money back into a company illegal?

[@mattgabriel3913]

@@yugiohpokemon5285 Buybacks increases the company's stock prices in the short-term. However, this strategy can also pump up stock prices even if the company is doing poorly. The ones on the inside who knows the intimate details of the company's financial health will know when to dump. This is how buybacks can be used to show a false positive image of the company's portfolio. And if you're an outside investor of the company who fell into the ruse, it's your loss.

[@alex2143]

Yugioh Pokemon How is buying shares when you know more than the market because you literally ARE the corporation whose shares they are NOT insider trading? It doesn’t get more insider than that.

[@huzzindaable]

This feels like actual news... Is the TV with turning on again?

[@omarhuda4997]

Maybe because clickbait news are less profitable online. There seems to be a pushback, I know personally if something sounds like clickbait, I don't watch it even if it isn't.

[@Just_A_Dude]

@@omarhuda4997 Same here. It's interesting how some people gobble that stuff up, and other people are instinctively adverse. I'm curious; do you also find yourself not trusting someone making promises unless you can see where the strings are?

[@omarhuda4997]

@@Just_A_Dude when it comes to politicians I'm very cautious when they make promises. On the other hand, I like to give ordinary people the benefit of the doubt when they make promises unless they are salesmen.

[@Goreuncle]

worth*

[@xexkansichi]

I'm really starting to feel this channel. Well done!

[@Lumencraft-]

You guys did a pretty good job on this report. Kept away from the mud slinging, and did report some of the benefits to. Thank you.

[@campy3]

Whatever team made this did a great job, earned a subscriber.

[@kamon242]

Those companies today? crying for Federal money after spending all their profits in buybacks.

[@bwing411]

Nicolás Ordenes exactly. But I blame the politicians allowing bailouts. I expect companies to be selfish. That’s their duty. The politicians duty is to keep it in check, not volunteer our tax dollars

[@owenb8636]

I'm an Australian investor in US stocks. This has been a great year for me. US taxpayer dollars have been pumping up my portfolio and paying me cold, hard cash in dividends. I can feel for any American who feels like that's unfair, but if you guys are going to give me free money then I'll take it.

[@onlypremiumlife]

How are you getting free money? Are the companies you've invested in paying you higher dividends due to the corporate tax break or is it because your stocks have increased in value due to buybacks?

[@owenb8636]

@@onlypremiumlife both. I'm getting increased dividend yields and the stock price is up 12% in the last year

[@onlypremiumlife]

@@owenb8636 That's great but the US taxpayers dollars have nothing to do with it. It's the tax break that's placing more money in your pocket not the taxpayers dollars. What stocks do you own?

[@owenb8636]

@@onlypremiumlife and tax breaks mean that the American federal government has less money to pay its expenses, which means it needs to borrow more money, which means US taxpayers pay more in interest. That's the longer way of saying the same thing. I'm invested in VTS, a Vanguard index fund that tracks the CRSP US Total Market Index.

[@PeterWW420]

We’re also massively benefiting over here because most people own stock, etfs, or mutual fund in our retirement accounts. It’s actually not taxpayer dollars fueling the rise-the government is simply skimming less off the top. I’ve made a ton of money in my portfolio. Oh, and I’m not the 1%. I’m make like 30k/year.

[@pyroromancer]

well if the "...government can't micromanage the market..." Maybe they shouldn't give corporations tax cuts. They'll take the tax cuts but not the government intervention on how to utilize the tax cuts. lolwat

[@rowlandmartin85]

Thank you CNBC on this video. I finally understand what a buyback is. It’s just as I though but I wanted to be sure.

[@big_stax_seven_tre_two597]

Promote more stock-based compensation for all workers.. then buybacks will benefit employees as well.

[@SSchithFoo]

Yeah but in most companies that is only allowed for a higher level employees.

[@me-myself-i787]

Or employees could use a portion of their salary to buy company stock. Exact same impact.

[@noneshere]

Proprietary sh!t destroyed GM too. Bring back Legos, not repair shops.

[@TENNSUMITSUMA]

what's legos?!

[@ThePorschefan]

I was hoping to see Elizabeth :( still great work! Love it

[@npip99]

Wow, this is journalism. This was actually a bit intellectually challenging to get through, but just the raw amount of facts, descriptions, research, put into this is, is incredible. Subscribed. I love how you showed left and right throughout the entire segment as well, leaving partisan ideology aside is so crucially important to understanding these economic issues, and it's why as an investor or even as a voting citizen that wants to stop recessions from happening again, you just can't watch news channels like Fox because you know they're trying to convey an ideology at the same time that they're mixing information. This was raw, unopinionated, facts and analysis. Absolutely love it.

[@mayrawalters8876]

Thank you for explaning the policy and not the politics of dems vs republicans

[@IStillLikeIke]

Wow thanks CNBC you actually changed my opinion on this. This is great content!

[@dreamsareme]

I have a problem with government telling a business what to do. But executives selling their own stock after buy backs scream it should be illegal or some type of moratorium on selling after implementing share buy backs.

[@davidmeek2994]

See I have more of a problem with companies screwing their employees over. Hey thats just me tho!! Silly dem here...wanting more power to the workers instead of the CEOS. UM HELLO FANTASY WORLD DUDE. WORK YAH WAH UP TA POLE DUDZ. YULZ BE CEO IN 2 DAYZ

[@tkhannibal2476]

4:30 Charlie sounds like Buffett

[@spongebob6956]

he works for Buffett

[@NOSE-ej2qz]

Is everyone working in Berkshire Hathaway old?

[@Stoneface_]

NO SE 😂😂 not really!

[@pinkynandi8894]

@@spongebob6956 he is his partner

[@DanBurgaud]

Stock Buybacks is the artificial method of making the economy looks improving...

[@R3tr0v1ru5]

Well the economy has improved under Trump. Lower unemployment and more jobs etc. Any sensible person who owns stocks will benefit from the buy-backs too as it helps them increase their savings.

[@iironhide6209]

@@R3tr0v1ru5 He means when it comes to general financial comfort of workers

[@atsmyles]

The fix is relatively straight forward. Eliminate the corporate tax and tax capital gains as ordinary income. This will eliminate over half the lobbying in washington, simplify the tax code, make it more progressive (Warren Buffet will always pay more than grandma). It will treat publicly traded companies the same as small business (usually filed as S-Corps).This will also fix the carried interest problem. Now, there will be no difference between paying dividends and stock buybacks. The small investor is always better off with dividends since they can't be manipulated as the video shows. The only difference that should be applied to capital income is the deduction of capital losses.

[@gregheffley2]

I would institute a 20% VAT tax instead of the corporate income tax and get rid of a lot of corporate tax deductions/loopholes.

[@atsmyles]

greg heffley VAT is a sneaky form of sales tax. Since the consumer is the one paying, they should be treated honestly by the government, and should be shone what the full tax that they are paying. So for full transparency in a democratic system, a sales tax(on the final sale to the consumer) is preferable. But that is a separate discussion

[@gregheffley2]

@@atsmyles Any tax on a corporation is indirectly a tax on the consumer. A VAT tax would just be harder for corporations to avoid imo.

[@sophiaatn5339]

I just heard about this and now it has been recommended to me THANK YOU

[@freetrailer4poor]

Buybacks are great this is a complete propaganda spot and the reporter doing it is an idiot.

[@haroldharold3975]

I agree that share buyback if done at a price when it is undervalued is beneficial to the shareholders (It does in a way add value to existing shareholders that hold). Therefore, if the price is done right, it doesn't matter if the executives are selling right after a buyback announcement. It all comes down to valuation. But there are too many charlatans roaming about looking to enrich themselves.

[@connorjensen443]

I think there should be a checklist of criteria that need to be met before any company is allowed to do a buyback. - All employees, domestic and abroad, must be paid a living wage based on their geographic location. - The company must be able to demonstrate that their operations are environmentally sustainable. - Executives must demonstrate that a buyback would primarily be in the interest of outside shareholders, not them. And of course, all corporate tax loopholes that allow companies like Amazon to pay nothing in federal income tax need to be closed because no company should be generating profit without paying their fair share into the system that makes it possible.

[@hellslayer9638]

if u see it in a view of crisis it actually helps the economy to not to go in the free fall in crash . and most importantly it somewhat limits the crash

[@dimejotape]

Great content!

[@prometheuswiggins1126]

5:35 Raises a great point

[@tspidey007]

The one question that the entire video failed to ask is, what economic impact would have occurred if that $1.1 Trillion Dollars been distributed as dividends or increased business investment in Capex or employee wages and benefits? The answer is higher GDP, increased wages and benefits , and a higher standard of living for everyone. The other thing that this video failed to mention is that most companies buying back their shares are issuing debt (writing off the interest expense) to buyback their shares. Therefore, CEOs and executives load up the corporate balance sheet with debt to buyback their shares that constitute the majority of their pay. It is a pathetic racket, and needs to end. I would require any company that wants to repurchase shares have to spend 2:1 in dividend payments for every dollar of stock buybacks and prohibit companies from buying back shares with debt proceeds.

[@Tttb95]

You dont understand corporate finance at all then... Most of your assumptions and logic are just completely incorrect. Buybacks actually create MORE wealth for all long term shareholders. Also the reason why they have buybacks and dividends is because there are no projects that the company believes will produce shareholder wealth. Financing buybacks through debt may be true for some companies but not common practice among larger players. And even then, if I can borrow at 4% and the expected return for the stock is 8-10%, I would be stupid to not lever up and buy back as much stock as possible. Literally the first thing you learn about dividends and buybacks in corporate finance is that neither in of themselves actually increase total firm value (see Miller and Modigliani), and that with current taxation, buybacks are preferred. Try actually researching before you type such drivel. You sound like Warren going off on US GAAP

[@Baker.Matthew]

T tba so a company makes money to buy parts of its own company to make money? This is smart to you?

[@Tttb95]

@@Baker.Matthew it's not making money. You also clearly know nothing about corporate finance. They aren't earning any profits. They're effectively redistributing wealth from some shareholders to others.

[@Baker.Matthew]

T tba why do companies need to redistribute wealth among shareholders? From what most have said about stock buy backs is that it will falsely prop up the price of a stock.

[@Tttb95]

@@Baker.Matthew Because owners like to get paid... Literally the exact same reason why they pay dividends. Most people are dumbasses. Its only artificial if the company does a secondary equity offering to dilute shareholders. Buybacks and dividends with DRIPs are almost the exact same thing from a theoretical perspective, yet not one of those people will harp on about dividends. And to the argument that buybacks inflate numbers, just account for a decline in sharesoutstanding and youll be fine. Its really not hard.

[@monk3d]

Americans don't seem to understand that tax cuts cost money. If the US government was an apartment, the tax cut would be as if your rich roommate decided to stop paying rent, but he still wanted to stay. Then, he forces you to take a loan from a Chinese bank to pay his portion. While at the same time he is putting the former rent money in his kids trust fund.

[@kassylang3355]

i love this issue, which can help me learn more about market

[@lopsrobby5780]

GDP = C + I + G + NX. The U.S. economy(GDP) is close to 75% consumer spending. Tax cuts for consumers would create more jobs than tax cuts to corporations. A growing consumer spending will lead to more expenditure in property plant and equipment by corporations.

[@piotrd.4850]

But where? In China?

[@ignmorales]

Buybacks are the result of unprofitable projects available to invest. The question is why tax cuts when economy is at full employment. That's why buybacks have been huge lately.

[@venkatbabu186]

What is essentially buy back. Reducing risk in investment plans.

[@guardiabreak234]

Buybacks will always skew numbers because it artificially reduces the amount of shares outstanding, pumps up price, and adds no real value.

[@yugiohpokemon5285]

Guardia Break that’s literally not what it means whatsoever. You don’t know what stock buy backs are.

[@guardiabreak234]

@@yugiohpokemon5285 says the guy who uses a google search as his own logic.

[@PeterWW420]

Guardia Break It’s simply a way to return money to shareholders just like a dividend. Reducing outstanding share is not artificial-you literally own a larger slice of the company. Which is objectively adding real value to each share.

[@Tuxster3]

Share buybacks are nothing more than a fancy form of stock price manipulation! As an INVESTOR, I want that buyback money given to me as a DIVIDEND! Let ME invest that money rather than the company.

[@phanirajkurra6480]

Great explanation and analysis, really love it!

[@yardmasterswealtheducation8424]

If companies were formed and built properly, there would be no stock buy backs, because there would be no stocks.

[@Discovery_and_Change]

0:24 In January 2018, corporate tax rate reduced from 35% to 21% 2:25 Buybacks often occur when a company's CFO thinks the stock is undervalued 2:51 Jim Cramer comments on buybacks

[@henryaurum3337]

Good job! You managed to make a WHOLE video without slinging poo everywhere!!

[@DeveshT]

Wow, finally someone noticed elephant in room.!

[@thecapone45]

Watching this was me in support for power taxes and siding with trump. Then realizing that he expected companies would “create more” jobs. The Same line used over and over again. No. You can give people money back and then expect them to spend that money again. They’re gonna save it. Goes to show how similar the left and right are when it comes to big government.

[@AmbientWalking]

Good report.

[@codezier2738]

Dirty tricks. But its not the corporate fault its the capitalist society we are in that gives incentives to executives on buybacks. I like the idea that suggested executives can't sell shares in that specific window that way the buyback's negative effects are limited. giving benefits as Burney Sanders suggested will just hurt shareholders altogether and benefit workers (not bad for workers but shareholders will suffer greatly from the buyback).

[@lSeKToRl]

Why doesn't cnbc talk about the real reason for buybacks most executives have significant investment in the company they work for as compensation. Buying back increases executive wealth. Who will tank the company fire employees and then move on to new job.

[@tommy2346]

A good us eof money would be part a special dividend, so companies don't have to cut it later. (if for example they hike the divided to high and is not sustainable in the future, a special divided would make every shareholder happy). Part should be reinvested in business and growing it, and smaller part of excess cash should be used to buy back hour own stock if the price makes sense.

[@bicyclist2]

Hmmm. Interesting. Thanks.

[@thetommantom]

AI insider buy backs on extreme levels can inflate prices to entice customers. Sell at a loss to lower profit or income reports. Market manipulation.

[@the7311]

Because businesses will hire new people and self invest without more demand. That’s smart

[@gino3286]

as long as management is rewarded with stock options, that can be a substantial part of the variable salary, they will always have an interest in raising the value of the shares by means of intense buy back operations ... am I wrong ? if they put objectives on earnigs for instance the situation will change dramatically. Buy backs lead to excessive pe ratio that keep investors away usually

[@_Wai_Wai_]

Question, when a company buys back the stock, then who is the owner of said stocks that has just been purchased? Are the shares redistributed to founders, to current shareholders, etc...?

[@fendermon]

I believe the company can retire/void the stocks or just hold them (as treasury stock) to be given out as options, used to purchase companies, or maybe resell later if cash is needed. @FW Poon.

[@adanactnomew7085]

They actually disappear

[@investingstories3844]

Well done video

[@justaperson8385]

Good story hope it stays up to date

[@Alphahydro]

Buybacks combined with good fundamentals is an excellent combination and a win for the shareholder. You're getting a bigger piece of the pie for the same cost basis.

[@killap3nguin]

It’s odd how most media outlets think the tax cuts were a one time thing. It’s permanent for now. Year over years businesses and economies change. Working class and corporations paying less tax is a good thing.

[@Deathmastertx]

On the other hand, the tax cuts raised the deficit which increases the price of borrowing capital and appreciates the exchange rate as foreign capital flows into the US, which isn't great for exporting industries. Congress and the Executive branch have not been able to cut government expenditure to pay for the tax cuts. You also have to consider the effects of distribution of income as well as the tax cuts disproportionately benefited the wealthy and, if government expenditure were cut to reduce the deficit, those expenditures tend to (not always, obviously, look at things like agricultural subsidies) help low-income earners.

[@Paul-ft9dn]

working class didnt really get much of a tax cut. around 83% of the tax cuts went to the rich and corporations. And the 17% that went to the general population is temporary. The ones for the rich and corporations are forever. Also, tax cuts come at a cost of exploding debt and deficits which means less spending for things like infrastructure, health care, education, and social benefits.

[@loveflying4488]

@@Paul-ft9dn obviously people paying more tax will get a bigger tax benefit. Look at the skew for income bracket s and percent of federal income tax paid.

[@dosmastrify]

3:00 oh hey, he's talking about sears!

[@brycehutchison7245]

Essentially a way for C-level to profit off selling their shares after artificially raising stock price, in an increasingly uncertain economic time.

[@Mauropmg]

Thanks

[@ramonedetroitguam6075]

lol, company buy back...!? yeah what the fed buy back...!?🤔

[@tendar6666]

5:52 who are executive? Anybody know? Plz teach me.

[@DanielRodd]

Everything is green today in my portfolio: $BAT $XLM $XRP $ETH $BTC $BCH $VET $ENJ $ICX $NGC $BNB $FUN $LTC $ADA $IOTA $ATOM What a beautiful year

[@deep.space.12]

Why companies use stock buybacks? Because stupid double taxation when they want to pay dividends to their shareholders! Companies were already taxed once via corporate tax, and still investors have to pay 25% dividend tax to get their fair share of taxed company profit?

[@monk3d]

Most companies traded on Wall Street pay little or no taxes. Amazon, GE ... Double taxation mainly impact companies that aren't traded publicly.

[@nonamuss9991]

The irony of saying that Congress should have no input on stock buybacks ignores the fact that they were illegal prior to 1982 and approved by congressional edict. In addition corporate tax cuts are basically taxpayer subsidies to corporations since the deficits created have to be made up some way since the money wasn’t used to enrich the economy and produce additional tax revenue as originally intended… So why shouldn’t Congress have a say in how “taxpayer subsidies to corporations“ are used.

[@me-myself-i787]

1:52 That's one thing I can get behind. Long-term capital gains should be taxed at the same rate as short-term capital gains. The government shouldn't discourage people from making the market more efficient.

[@thegoldenboy294]

I don't understand how a buyback reduce companies shares outstanding? Isn't the opposite? It reduces shares float but not outstanding or am i missing something? Can anyone help?

[@freetrailer4poor]

If there are 81 millions shares outstanding and the buy 6 millions shares, there are niw 75 million outstanding. The float is just a subset of shares outstanding. So both float and shares outstanding drop.

[@arashkborzoo]

Buybacks are market manipulation and insider trading and are unethical business practices, it shouldn't exist and that's it. Also this isn't a new idea it was literally banned because it's was described as market manipulation and insider trading until the 1980s But love the video and CNBC

[@TheMusicFan1297]

Who are you to judge whether buybacks should exist or not.

[@mrx2062]

Management paid with stock options may also be a reason for stock buybacks.

[@emancify]

That seemed honorable for the legislator who studied the relationship between stock buy-backs and insider's selling their shares into this momentum. However; I think that this legislator just figured out an easy way to receive donations for re-election. The insiders selling their shares are the decision-makers on which political campaigns to support. Slick... very slick.

[@pat4471]

Just like anything else buy backs can be good or bad, as a shareholder if you believe it bad vote so.

[@JediMik]

the state is the same everywhere, wants the perfect solution. reduced taxes - well done, but why break the market with new regulation ?!

[@Constellation3232]

Regulation doesn't break anything. It prevents a small handful of companies from dominating a particular market or industry. It's a race to the bottom when everyone is competing to sell their products at the lowest possible price. It does nothing to benefit the employees, and is not suistainable.

[@roeese1]

Imagine an executive sells lots of shares without the corporate buyback...??? What do you think would happen? If you can answer that question, you know why corporate buybacks are important.

[@monk3d]

Nonsense. Imagine the same exec holds on to his shares, and increases stock price through good decision making. Instead, they use company cash to temporarily drive the share prices up, then dump their shares. Eventually, the share price goes back down, and shareholders lost their cash and are no better off. Exec takes his windfall and invests in other company stocks.

[@1800options]

The executive is selling because he wants to profit from the buyback. It’s a different way to look at it for dividends. Instead of getting dividends you get the same money put back in shares purchase and making a profit via capital gain tax. It’s an accounting logic .

[@monk3d]

Dividends are a 1:1 relationship. Buying back stock doesn't necessarily increase stock price proportionally. Once the artificial buying stops, the price usually falls back to its original price or lower. Remember the company doesn't decide the stock price, the market does that. Buying back Sears stock didn't keep it from falling.

[@jameskresl]

Dividends are not typically taxed at income rates.

[@richardsalley9848]

Please tell us more about how the rich get richer! Very informative!

[@bwing411]

In my opinion I expect the companies to do whatever they can to legally benefit themselves. Their job is to profit for their shareholders, first and foremost. If the outcome is getting bailed out after spending all of your earnings selfishly, I blame the politicians allowing the buybacks. They are letting companies hold employees as hostage. I don’t blame the tiger for biting someone. I blame the zoo keeper that has a duty to prevent that. Aka politicians.

[@En_Gho]

Stock buybacks = asset price inflation which benefit the wealthy disproportionately Investing tax breaks in worker benefits and research and development = increase in capital and labor inputs, which in turn results to an increase in output resulting in true economic growth and productivity Buybacks do not increase productivity or economic growth but they sure do increase wealth inequality which acts as a major headwind against economic growth. Economics, Finance, and History majors know this. So, why don't politicians listen to us instead of greedy capitalists who will grow their wealth at the expense of the entire economy? Even Charlie Munger, about a pure a capitalist as you can get to speak, was trying to warn everyone that these massive buybacks would not end well for the economy. 1 year and a full blown catastrophic pandemic later and many of those companies wish they had invested that money more wisely.

[@Howard675]

Share buybacks should be allowed, but bail-outs should be eliminated. If the corp is making a bad decision, it should be held accountable through economic checks and balances. Not government intervention.

[@tenzackyogi1742]

This is like dump and pump shares and dividends.

[@richardbentze3913]

SoUrCE GOldMaN SAcHs

[@111mmgg]

Richard Bentze trustworthiness 🤣

[@ricky5227]

I like the songs, anyone know the name of the tracks?

[@theoneandonlyyoko]

What? Do you mean to tell me that rich people like to hoard money? Na that cant be right. That’s why revenue tax increase is the way to go, you force them to pay the gov or invest

[@opnion2294]

call pump and dump ???

[@uliseslopez3248]

This video loss credit once Jim Cramer appeared

[@EnriqueDominican]

bbbbuya !!!🤣🤣

[@davidmeek2994]

blanket assumptions earn you zero credit always.

[@Gunner77269]

did CNBC put the mad money clip in only to purposely say the opposite right after?

[@macrolosses]

Imagine your neighbor telling you to pay your gardener more rather than refinancing your house.

[@IlanHirschfield]

Now that the coronavirus market mayhem is in full swing and I’ve educated myself on what buybacks actually are, it’s clear to me why buybacks are a shortsighted, profiteering, malicious, and possibly illegal business activity. There was every indication over the course of last year that the world economy was slowing down. Yet companies wanted to dance until the music stopped and then whined to Washington that they needed to be bailed out in order to survive. Please. Get a bankruptcy package and restructure. Dump the executives who didn’t want to save money for a rainy day. Especially when it was clear one was coming soon, even though the virus didn’t rear its head until January/February of this year. Danielle DiMartino Booth contends that the world economy probably still would have experienced a recession this year, but with a different catalyst

[@vladimirputin.official.]

I would definitely prefer Dividend payout rather than a stock buyback or diworsification by the company in name of acquiring other companies of different industries.

[@zachb1706]

Stock buybacks are better from a tax point of view

[@shalomccs]

Corporations lobbyists always find the way to the benefit of the multinational corporations.

[@connorfischer3283]

Well of course they are going to buyback stock the market had one of the most unjust crashes in history due to the lack of security and moreso lack of understanding of the website Facebook. Fearful selling and discounted prices for CFO’s to buy for a profit, and of course they’ll sell into the move up and avoid the turbulence people create

[@CabinOnTheWater]

Corporations use stock buybacks because stealing money out of the Company checking account is illegal. If, however, you can get the company to give you a bunch of stock and stock options you can then sell them back to the company during the stock buyback programs. It's scam. Just like everything else done today concerning money.

[@freetrailer4poor]

Buybacks help all the investors of stocks equally. They help 401ks. Virtually all the con men like Al Gore can be attributed to stock based compensation. All the fraudulent Silicon Valley emotloyees use this method to steal from the great stockholders.

[@DerekMusic13]

I never realized how similar Munger and Buffett sounded lol

[@Josh-lp7ek]

If your asstes r related to your stock options, u better pump those prices up & get out at the top. U really don’t want to miss the train.

[@a7dfj8aerj]

When i saw source: Goldman sachs i just laughed out loud for a while

[@derekwilson8432]

So how is this not manipulating markets?

[@joewilliams6851]

well this didnt age well with airlines

[@drew1998]

Trump did say it was going to create jobs in the snippet show, and we are sitting on a few months of job growth & payrolls beating expectations...

[@BlackGoldenAge]

Not true. Companies could do what they want.

[@jeetendrakumar1596]

Isn't that what companies supposed to do , bettering their company

[@monkeymoonky7900]

Well the purpose of the tax break was to encourage the corps to increase spending/wages to stimulate the economy.

[@onlypremiumlife]

Buybacks should not be regulated BUT! That extra cash is only available because of the tax break not because the business has performed better, so that extra money should be used to pay investors higher dividends and increase workers pay! As Trump says "It's a Christmas gift" so why not share that wealth with investors, managers and workers. Buybacks will only enrich top managers who own shares.

[@sbaumann8810]

Duh! What did ya think was gonna happen?