or for R&D, improving operations, or anything else that benefits the company.
Is that so bad? If I was a Meta shareholder I'd very much like the firm's profits to me, rather than funding Zuck's metaverse escapades.
> We belive out stock is undervalued, so we will buy it ourselves. This will reduce our cost of capital and generate value for our shareholders in the long term.
this phrase makes no sense because it's an executive buzzword: the value of a stock is what someone will pay for it
no stock is undervalued, it's at exactly the correct value. Executives conducting buybacks thus simply want the stock to be valued more than it is (so they can make more stock-priced-based-compensation money)
that an executive from a company like Shopify has options for cash like creating value via growth, or paying their workers better, but instead chooses to just increase their personal wealth (and, incidentally, that of shareholders as well), is precisely the leadership failure being pointing out here
Because that's how companies are supposed to operate? Broadly speaking, companies are generally expected to pay their gross revenue three groups of people:
1. shareholders
2. bondholders/creditors
3. employees
Employees get first dibs on the cash, but the amount they're expected to earn is capped. Bondholders comes next, and shareholders come last. If there isn't any money left over, they get nothing. In exchange, they also get all of the returns, should the enterprise succeed, as well as control over it.
I always considered employment a fairly simple exchange of my services for a fairly set rate, and investors/owners/funders to be the risk takers for ups & downs?