Friday, February 28, 2020

The Ugly Truth Behind Stock Buybacks

Here is the article.

Now, I have some theories on why stock buybacks have gotten so out of control. Mostly, I think it’s because we’re in a period of massive technological disruption. New industries like cloud computing, electric cars, and streaming video are rapidly changing the world. But in my opinion, older companies like HP have been too slow to adapt, and rather than investing in research and development (or simply holding onto cash) the corporate boards of legacy businesses are bolstering stock prices the only way they know how: playing defense and buying back stock.

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