Originally Posted by
Gunga Din
Stock buy backs are a scam.
Look at Deltas cash position in the early 2000. I think they had 4B cash and some CFO did a buy back of 1B and in a month the price was even lower than when the buyback happened. 1B literally evaporated.
Instead of rewarding share owners in the long run (like dividends) they temporarily bump up the stock price which most likely "benifits" the few owners with many many shares, usually granted through stock options, like the executives.
The scam usually doesn't result in any long term gains, and the executives know this, so you can expect to see insider selling.
What this really does (if this is where money went) is take money off the books so the company doesn't look so attractive to a potential buyer who would pay for our purchase with our own cash in the bank.
"benefits"
Just having fun.
So you are saying that the people who control the money at Spirit are using $100,000,000 to buy back outstanding shares, resulting in an increase of the price per share?
Those same people are also compensated with stock shares, so they have -in effect- given themselves a pay raise by increasing the price of the shares that they are able to cash-out?
Meanwhile the pilots, who are among the lowest compensated in the industry for the A320, are told by the CEO, COO, and VP of FLOPS that we must give up our own quality of life provisions in order to pay for our own raises.
I wonder how much our current "ask" in negotiations would cost the airline, vs the $100,000,000 our executives just vaporized in stock buybacks.