Are Share Buy Backs Legitimate?

[jb747]

Seriously, why are share buy backs even legal? They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

 

[muppet]

Seriously, why are share buy backs even legal? They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

Dividends create an involuntary taxable event for investors. Buy-backs don’t.

 

[marks]

Seriously, why are share buy backs even legal? They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

It also stops people asking about your free cash sitting on your balance sheet not being used.

 

[Dr Ralph]

They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

Incorrect.

 

[Peasant]

Seriously, why are share buy backs even legal? They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

Privatise profits, socialise losses!

When the next aviation downturn inevitably turns up, QF will be cap in hand begging for government aid because it’s short on liquidity and only weeks away from bankruptcy…

Nary a thought for the $2b or whatever it is that’s now been spent on buybacks before they make meaningful progress on the fleet upgrade.

 

[jakeseven7]

Seriously, why are share buy backs even legal? They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

Ummmm are you ok?

 

[Brissy1]

Seriously, why are share buy backs even legal? They're simply a rort for the execs to increase their bonus, whilst doing nothing for the company.

Correct. In theory. Can't increase assets/share by reducing asset backing/share to buy and cancel shares... if the shares are trading at their asset backing. And if the shares were trading below their asset backing before a buyback, the "hope" is that they will be closer, after. And sometimes they do but it is an indication of lazy management... good management would use the funds to grow the business. But the corporate advisers and brokers get a drink out of it.

 

[drron]

Incorrect.

Really. If a company has a market capitalisation of a billion dollars and they do a 100 million in a share buy back the market usually reprices it back to close to a billion dollars as the market hardly ever behaves rationally. It has always done so in the 40 years I have been trading so share price goes up ~ 10% and it is usually share price that determines exec bonus levels.
Similiarly a share price goes down when a company goes ex dividend but within 2 weeks post dividend it is usually back to very similiar levels that it was prior to the ex dividend date. In fact it was one of the ways to make a quick profit especially if the shares dropped by more than the dividend amount.

 

[dajop]

Meanwhile NZ has instead opted for a special dividend. A different approach to QF in a different jurisdiction, also assume of more benefit to their majority shareholder (the government of NZ.)

A one-off, fully imputed special dividend of 6.0 cents (NZD) per share has been declared by the Board today, in recognition of the exceptional financial result delivered in the 2023 financial year.