> Dominion plans to use about $3 billion of the after-tax proceeds to buy back its shares later this year.
So, they sold this asset to buy back shares? This seems like a seriously short-sighted play.
So, they sold this asset to buy back shares? This seems like a seriously short-sighted play.
If a company has money it cannot productively spend, it should return that money to shareholders. Stock buybacks are a tax efficient way to do that.
The company believes the asset wasn't very profitable for them to own, so they sold it and gave the shareholders the money back.
It is quite difficult to beat the S&P 500, and they're saying they don't have any ideas which can.
More to the point, if the company is seeing such great profits then their competitors should be undercutting them. If they don't have competitors then maybe they should be regulated more like a utility and give that money back to the customers. Stock buybacks usually end up being just a handout to the rich, which they don't need.
It's not that the companies aren't profitable, it's that past a certain point their money is more valuable as cash to their shareholders than anything the company could use it for.