Re:Airlines want to cancel rule requiring them to refund far...
by kdamica on Tuesday April 07, 2020 @05:50PM
(#22807842)
A buyback has the added effect of reducing the number of shares, increasing their Earnings per Share (EPS). Since EPS is a widely-used metric for valuing a company, it's not quite the same as a dividend.
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Re:Airlines want to cancel rule requiring them to refund far...
by jariel on Tuesday April 07, 2020 @07:34PM
(#22808634)
In a 'perfect' buyback which was spread across all investors equally -> it's neutral. (Percentage ownership remains the same, cash was transferred to investors)
That it won't ever exactly happen that way means some will win/lose depending on their individual situation, but it should be something approaching a wash on average.
Again - stock buybacks are not 'windfalls' for investors it's just a normal part of financial operation.
The question of how much cash on hand certain businesses should have to have ... is a separate issue.
If the government wants to regulate this like they do banks, well, that's an idea, but I don't think it's the best one, but spurning businesses because they did a buyback last year and are otherwise operating normally is definitely not the right approach.