Stock buybacks is sacrificing the long term. It's artificially inflating the stock price with money that should have been used to grow the company.
And speculators don't care about any of that while the line is going up. They're not stupid, they just don't care about the actual health of the company, since today it is almost completely decorellated from its share price.
Look at Tesla and tell me why the investors have not yet fleed the scene, in light of the disastrous signals that keep popping up. Because it doesn't matter to speculators.
Dividends are rightfully limited in their amount. Buybacks are a way to bypass this limitation, and used to be legally grey until they were fully legalized sometime in the 1980s.
> when the company does not have a better use for the money.
I think that's nonsense, you can always pay your talent better, invest in new equipment, diversify your offerings...
And speculators don't care about any of that while the line is going up. They're not stupid, they just don't care about the actual health of the company, since today it is almost completely decorellated from its share price.
Look at Tesla and tell me why the investors have not yet fleed the scene, in light of the disastrous signals that keep popping up. Because it doesn't matter to speculators.