In November 2016, Goldman Sachs’ chief equity strategist David Kostin estimated that, in 2017, S&P 500 companies will spend $780 billion on buybacks — a new record.

That’s crazy.

For most of the 20th century, stock buybacks were deemed illegal because they were thought to be a form of stock market manipulation. But since 1982, when they were essentially legalized by the SEC, buybacks have become perhaps the most popular financial engineering tool in the C-Suite tool shed. And it’s obvious why Wall Street loves them: Buying back company stock can inflate a company’s share price and boost its earnings per share — metrics that often guide lucrative executive bonuses.

As Reuters wrote recently, “Stock buybacks enrich the bosses even when business sags.”…Forbes

“Stock buybacks enrich the bosses even when business sags.” /Reuters                                         Claudio Munoz
https://www.w-t-w.org/en/claudio-munoz/