Probably only the latter. My point was that executives (share sellers) benefit and it creates potentially toxic incentives.

Executives are always incentivized to increase share value; that’s their job. Note: it’s the board of directors that issues new shares not executives. Executives can sit on the board, but the two are not the same. Executives are actually appointed by the board.

The reason stock buybacks are viewed somewhat negatively is because it’s a lazy way to increase share value. Preferably executives would use the money to come up with new products/services to increase revenues. But if we’re talking about huge mega corporations, who already spend a lot of money on R&D, capex and/or acquisitions, then using some additional cash flow on buybacks makes sense.

In Intel’s case, the buyback merits some discussion because it is implied that government subsidies are being used to buyback shares which is not the intention of the subsidy.

Edit: IMO, I don’t think Intel underinvested, I believe they invested in many failed ventures and under their past and current leadership they are not able to grow the company in any meaningful way.

> My point was that executives (share sellers) benefit and it creates potentially toxic incentives.

This seems like a good incentive. Executives of course don't have to have any shares, although they probably will, but that's not "toxic".

I know that toxic is now the blandest word in the language due to overuse, but even given that this seems distortional.

Let's say corp XYZ has 100 shares out, and they're owned by 50 people.

At any point, there are people trading, buying and selling those 100 shares. Buyer 51 comes along and wants to buy a share. He can only buy a share if one of the 50 owners are selling. So, he has to offer a price that'll convince one of the 50 to sell.

XYZ Corp decides to do a buyback. They buy 20 of those shares. In that moment, they will certainly create a spike in demand for the 20 shares.

But later on, now there are only 80 shares out. When buyer 52 comes along to buy a share, there are fewer shares, and fewer sellers. He might have to offer more than Buyer 51 to actually get a share for that reason.

> But later on, now there are only 80 shares out. When buyer 52 comes along to buy a share, there are fewer shares, and fewer sellers. He might have to offer more than Buyer 51 to actually get a share for that reason.

By buying that one share buyer 52 gets ownership of 1.25% of the company. Buyer 51 only got 1.00% of the company when they bought their share. You need to take that into account when comparing share prices.

That's not pumping stock, though, right? Pumping stock is artificially increasing the number of buyers, for a short period. You're describing reducing the number of sellers. Which may increase the price, or may not.

You could argue that the buyback itself, like the moment where the company actually buys the shares back, is a pump moment. they could have the demand far outstrip the typical demand in the moment. But long-term, the price should be higher as they have decreased supply.