Originally Posted by
300SMK
$5 billion dollar stock buyback at 7 years into a bull run. It doesn't take a rocket scientist to figure out that money could replace all the 88's or give us a fleet of A350s in SEA and LAX to compete with Asian and ME carriers. Nope, it goes to good will.
I will take the 20% PS and drag my feet like no other. Fly the contract.
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Your analysis is spot on except for the reasoning. It has nothing to do with goodwill. Everyone knows there's almost no such thing as long term investors anymore. Institutionals and hedge funds are very short term oriented. This buy back is NOTHING MORE than management using internally generated cash to buy stock as needed to ensure their stock options can be exercised at a profit after the lock-up date. It's a pure personal enrichment play.
If the health of the company was their main focus, they would use these funds as you've suggested above.
Carl