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Re:Bird lays off hundreds via Zoom call by cycrutchfield on Friday March 27, 2020 @08:58PM (#22708279)
Especially because a lot of those major American companies have spent the past decade loading up on debt and buying back their shares at historically high prices.
Re:Bird lays off hundreds via Zoom call by Alex3917 on Friday March 27, 2020 @09:03PM (#22708315)
Isn't a stock buyback exactly the same as paying a dividend, but taxed at a lower rate? I don't see why these companies are being demonized, the government should just let them go bankrupt and let the public buy their assets for pennies on the dollar.
Re:Bird lays off hundreds via Zoom call by idoubtit on Friday March 27, 2020 @09:19PM (#22708397)
That's not the way it works. For instance, over the last 10 years, Boeing spent 45 B$ in buyback out of its 60 B$ profit. Now that the situation looks grim, Boeing does not have enough cash to live through the crisis. But it won't go bankrupt, it will get 60 B$ of cash from today's federal government bill, and probably more later on.
Re:Bird lays off hundreds via Zoom call by lotsofpulp on Friday March 27, 2020 @10:23PM (#22708663)
What would you have done? Saved $45B in cash in case a virus like this causes the world economy to stop?

There is no world where an airline/hotel or any business could have possibly saved enough cash to fight a 90%+ drop in revenue for months and still remain competitive in the market.

Re:Bird lays off hundreds via Zoom call by adrr on Friday March 27, 2020 @10:34PM (#22708709)
Apple and google have large cash reserves. They also could have paid off all their debt with the profits.
Re:Bird lays off hundreds via Zoom call by lotsofpulp on Saturday March 28, 2020 @04:49AM (#22709995)
Apple and google are uniquely extremely high margin businesses, and even they would be shaken after a few months of no income.
Re:Bird lays off hundreds via Zoom call by saagarjha on Saturday March 28, 2020 @02:52AM (#22709676)
I thought that for them it was just better to keep borrowing than to move around their money?
Re:Bird lays off hundreds via Zoom call by jdavis703 on Friday March 27, 2020 @11:14PM (#22708888)
Boeing’s crisis started long before CV19. The 737 Max debacle was already weighing heavily on their balance sheet.

The point is, it’s hard to predict the future. Who knows if the future will bring a fatal bug in your software, a pandemic, or both. But regardless, we all know tough times will always happen, and to therefore be prepared.

Re:Bird lays off hundreds via Zoom call by lotsofpulp on Saturday March 28, 2020 @04:51AM (#22710004)
And my point is you can’t be prepared for months of no revenue. No consumer is going to pay the high prices needed for a business to insure itself for an extinction level event, because an alternative business won’t and will offer lower prices.

For example, a hotel owner can choose to squirrel away cash to protect the hotel and its employees for months of no income. A competing hotel will instead choose to renovate the hotel. Which hotel will customers choose to stay at?

Re:Bird lays off hundreds via Zoom call by jdavis703 on Sunday March 29, 2020 @02:19PM (#22721246)
The “prepper” hotel could instead take out a loan (using their savings as collateral) to renovate.
Re:Bird lays off hundreds via Zoom call by goatinaboat on Saturday March 28, 2020 @04:19AM (#22709917)
What would you have done? Saved $45B in cash in case a virus like this causes the world economy to stop?

The job of management is to find a profitable way to deploy capital. If management are returning capital to shareholders, outside of expected dividends of course, it’s because they are bereft of ideas. What would I have done? Invested a large portion of that money in long term R&D and careful strategic acquisitions. It’s the same over at IBM. The current generation of managers have inherited cash flows set up by their predecessors but have no idea what to do with them.

Re:Bird lays off hundreds via Zoom call by lotsofpulp on Saturday March 28, 2020 @04:48AM (#22709991)
What R&D would pay the airlines’ and hotels’ employees for the next few months?
Re:Bird lays off hundreds via Zoom call by goatinaboat on Saturday March 28, 2020 @06:21AM (#22710298)
OP’s question was about Boeing, but it’s true that the airlines also squandered their capital on share buybacks.
Re:Bird lays off hundreds via Zoom call by lotsofpulp on Saturday March 28, 2020 @08:22AM (#22710702)
Squandered means there was a better, evident option at the time. I have not yet been able to find a satisfactory answer to the question of what the companies should have done rather than buybacks, especially to mitigate the effects of a literal shutdown of basically entire lines of business resulting in no income.

The businesses in years past made money, invested some of it, spent some on R&D, and distributed some to shareholders (via buybacks). What other option was there?

Re:Bird lays off hundreds via Zoom call by cycrutchfield on Friday March 27, 2020 @10:37PM (#22708724)
Especially because they know that if they go under, the Federal government will have their back. It's win-win, baby! What's a moral hazard?
Re:Bird lays off hundreds via Zoom call by nutjob2 on Friday March 27, 2020 @09:17PM (#22708385)
The problem is when they all do it it becomes systemic risk.

The new meta is "if we all do the same stupid shit we'll get bailed out when the crunch comes"

The penalty for a bailout should be bankruptcy and nationalization. Taxpayers should profit, not lose.

Re:Bird lays off hundreds via Zoom call by untog on Friday March 27, 2020 @09:13PM (#22708370)
> I don't see why these companies are being demonized, the government should just let them go bankrupt

Well, they’re being demonised because they’re pushing heavily for a government bailout that will avoid them going bankrupt.

Re:Bird lays off hundreds via Zoom call by twblalock on Sunday March 29, 2020 @03:14PM (#22721715)
They only need the bailout from the government because the government forced businesses to shut down. How exactly is that the business's fault?
Re:Bird lays off hundreds via Zoom call by StanislavPetrov on Friday March 27, 2020 @09:14PM (#22708376)
They are being demonized because the government isn't letting them go bankrupt or letting the public buy up their assets. Instead the government is rewarding their greed and poor business practices by bailing them out and letting them keep all of the money they made.
Re:Bird lays off hundreds via Zoom call by HenryBemis on Friday March 27, 2020 @09:26PM (#22708431)
> ..bailing them..

Because some people may not realize/forget the source of these billions, these billions are either taxpayer money, OR these are new/fresh money (which means diluting the value of the currency for everyone).

Re:Bird lays off hundreds via Zoom call by bogomipz on Friday March 27, 2020 @09:22PM (#22708411)
The issue is not the stock buyback but the debt binge these companies have gone on to to buy back that stock. This has left them unprepared and exposed for any kind of a downturn. This exposure is being remedied compliments of the tax payer. "Privatize the profits but socialize the risk" seems to be their mantra. The buck only ever seems to stop at the CEO when the going is good. This is why they are being demonized.
Re:Bird lays off hundreds via Zoom call by Ericson2314 on Friday March 27, 2020 @09:15PM (#22708379)
Yes to all that. No tears, no bailout. Nationalize out of bankruptcy instead.

Do note that the buybacks last time were enabled by government loans. So that is a bit suspect on the governments part for not leveraging the power they did have.

But yes overall these silly critiques of strawmen I think just diffuse anger that should be directed at real things. No good.

Re:Bird lays off hundreds via Zoom call by guru4consulting on Friday March 27, 2020 @10:43PM (#22708752)
Apart from irresponsible behavior of not reducing debt or not keeping enough money reserves, few other points to note: - CEO and the executive board gets pay rise based on stock price increase which is a silly math because the total market cap does not increase.. - Share buyback gives a quick boost to share prices, and often, the executives have found to be selling shares immediately after share buyback. It's almost like they pre-plan the buyback and following stock sale. There are many studies showing this to be a more common practice.
Re:Bird lays off hundreds via Zoom call by Uhhrrr on Friday March 27, 2020 @09:32PM (#22708458)
Bird doesn't have any shares; they are on series D.