Originally Posted by
flyboy2181
Stock buybacks allow you to increase dividends without increasing the total amount you pay out. $1 mil paid out to 1 mil stockholders equals $1/share. $1 mil paid out to 500k stockholders equal $2/share. You’ve can increase dividend payouts without spending more money by buying back stock. Increasing dividend payouts and buying back stock are both good things.
But in this example you're not including the price paid to reduce shares by 50%. There are over 650 million shares outstanding of DAL stock. It'd cost you about $18B to buy half of those shares back. You can't "increase dividend payouts without spending more money" overall.