{"id":44214,"date":"2019-03-05T13:33:58","date_gmt":"2019-03-05T18:33:58","guid":{"rendered":"https:\/\/olduvai.ca\/?p=44214"},"modified":"2019-03-05T13:34:01","modified_gmt":"2019-03-05T18:34:01","slug":"corporate-share-buybacks-increasing-at-alarming-rate-again","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=44214","title":{"rendered":"Corporate Share Buybacks Increasing at Alarming Rate\u2026 Again"},"content":{"rendered":"\n
\"corporate<\/figure><\/div>\n\n\n\n


Photo<\/a>\u00a0by Mike Kalasnik |\u00a0CC BY<\/a>\u00a0| Photoshopped from original<\/p>\n\n\n\n

Corporate Share Buybacks Increasing at Alarming Rate…Again<\/a><\/h3>\n\n\n\n

Corporations have been using buybacks to \u201crob Peter to pay Paul\u201d since the Reagan administration created laws that allow it.<\/p>\n\n\n\n

According to a Goldman Sachs chart<\/a>, 2018 was a record year for buybacks, which neared $800 billion for S&P 500 companies alone:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Even though these companies bought back shares, which should<\/em> have spurred investment in more companies, that didn\u2019t keep the S&P from dropping 6 percent by the end of 2018. But corporations are still getting a benefit\u2026<\/p>\n\n\n\n

\u201cBuyback Monsters\u201d Perform Market Illusion<\/strong><\/p>\n\n\n\n

This \u201csleight of hand<\/a>\u201d illusion allowed Apple to increase<\/em> their market cap by $118 billion in 2018 on news that it would complete share buybacks in the amount of $210 billion.<\/p>\n\n\n\n

They used tax incentives along with other forms of capital to complete the buyback. This move only helped Apple\u2019s economy and their shareholders.<\/p>\n\n\n\n

But they\u2019re not the only company that has pulled off this amazing magical feat. Home Depot and \u201cnearly 80 others\u201d<\/a>are also dipping into the \u201cbuyback gravy train.\u201d<\/p>\n\n\n\n

Home Depot is in a class of corporations I call \u201cbuyback monsters,\u201d companies that have reduced their share count outstanding by at least 25 percent since 2010. It is by no means alone. Nearly 80 companies in the S&P 500 have reduced their share count by at least 25 percent since 2010, and more than 100 (20 percent) have reduced their share count by 20 percent or more, including some of the best-known companies in America.<\/p><\/blockquote>\n\n\n\n

Using Home Depot\u2019s 35% share buyback as an example, a CNBC article highlighted another implication of being a member of the \u201cbuyback monster\u201d club:<\/p>\n\n\n\n

All other metrics being equal, Home Depot\u2019s 35 percent share count reduction means that earnings appear 35 percent better, without any change in \u201cfundamentals\u201d like revenues, costs or taxes.<\/p><\/blockquote>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Photo\u00a0by Mike Kalasnik |\u00a0CC BY\u00a0| Photoshopped from original Corporate Share Buybacks Increasing at Alarming Rate…Again Corporations have been using buybacks to \u201crob Peter to pay Paul\u201d since the Reagan administration created laws that allow it. According to a Goldman Sachs chart, 2018 was a record year for buybacks, which neared $800 billion for S&P 500 companies […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[18769,171,8948],"class_list":["post-44214","post","type-post","status-publish","format-standard","hentry","category-economics","tag-birch-gold-group","tag-corporations","tag-share-buybacks"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/44214","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44214"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/44214\/revisions"}],"predecessor-version":[{"id":44215,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/44214\/revisions\/44215"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}