Originally Posted by
iahflyr
Remember that the purpose of a publicly traded company like Delta is to return value to the shareholders.
The disagreement is whether the value sought should be short term or long term.
Originally Posted by
iahflyr
You are correct that Delta management is incentivized to keep the share price going higher. That is their job.
That's not their job. That kind of short term thinking generally leads to short term longevity in business. Management's job is to ensure a long term and profitable entity. Good share pricing generally follows from that philosophy.
Originally Posted by
iahflyr
You are incorrect in saying that by doing things to increase the share price such as dividends or share buybacks (or as you call it the "shareholder value bonfire"), they are transferring money away from Delta's future.
There's no other way to look at it iahflyr. Stock buy backs and dividends do nothing for a company's future. It buys no R&D, employees or equipment. It is a complete waste.
Originally Posted by
iahflyr
Your future as an employee will be much better off with a higher stock price.
That's incorrect. My future will be better off with a healthy company with good management and a solid business plan. Allegiant has an extraordinarily high stock price...but I wouldn't want to fly for them. Would you?
Originally Posted by
iahflyr
If Delta's stock price crashes, management will be under more pressure from shareholders and the board of the directors to cut costs to increase profitability. That means less pay, longer hours, and worse work rules for you.
If Delta's stock price crashes without an underlying fundamental reason, it would represent a huge buying opportunity that many investors would see...thus reversing the price crash. If there is an underlying fundamental reason for the crash, no dividend or stock buy back will save you.
Originally Posted by
iahflyr
If you're concerned about that "shareholder value bonfire", why don't you go out and buy some Delta stock?? Every analyst in the world has it rated a buy. It's been on a tear for the past 3 years. And now the price of oil has just crashed more than 20% in the past 3 months.
I'm a contrarian investor who hates airlines as investments. That's just me.
Carl