This dude is Churchillian. Prolific and strike right at the heart of the issue. Must view.
I sense big regulatory reforms coming for Wall Street when the next Administration comes to power. It will probably begin with capital gains tax moving back to marginal income tax rates.
“Buybacks are the primary example of a growing strain of incompetence amongst CEOs and amongst boards,” Social Capital CEO Chamath Palihapitiya says. “And it’s where we need to start thinking about how the rules need to change.” https://t.co/dIbizumtqG pic.twitter.com/rCqkiyMxY7
— CNBC (@CNBC) April 22, 2020
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In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.
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Global Macro Monitor
Incompetent?? Using the company money to buy your stock options you are flipping so as not to put selling pressure on the stock in the market. Sanctioned by the SEC for years, so all is good. Bids the stock up for the other shares not being flipped by officers and directors, so share holders are happy. Forget about using the money for the company capital investment, or debt reduction.
Stock price is all that matters until it tanks, and debt has to be rolled or paid down, as few, make that very few, have free cash flow. “If the music is still playing we have to get up and dance.”
The Banksters are loaning them debt money to buy up the stock, so fees on the lending AND fees on the stock buybacks, and the circle jerk is complete for the Friday afternoon Tequila and coke fests.