Hacker News Reader

Stock buybacks are yields for shareholders the same as dividends (just with different tax implications) - definitely not “down the sewer”.

Most companies have a limit to the amount of R&D they can do before running into a wall where the payback becomes unprofitable (for complicated reasons).

Isn’t a stock buyback a way of telling their shareholders “we think you would be better off investing your money elsewhere”?

No, it's a way for execs to get the EPS up, and thus their options up, without, you know, increasing revenue or inventing anything. Seriously.

They used to be illegal. They should be illegal again. If they were, then that $65B would have been invested in R&D (and in their employees!).

The money would have been returned as dividends instead. For-profit companies are not intended to exist just to spend all profits on themselves (although Amazon is one obvious counter example amongst many).

Or paid as dividends? Stock buybacks are in part a way to financial engineer around dividends and capital gains being realized and taxed differently.