https://www.theatlantic.com/magazine/archive/2019/08/the-stock-buyback-swindle/592774/

Not bad. I think it was about 80% fair. What I think is painfully obvious is that, in this cyclical industry, when it rains it pours and it will rain again one day. We (and the rest of the airlines who do this now) will rue the day we lit tens of billions of dollars on fire, and governments and employees will be tasked, again, with bailing them out. Or what remains of them. And whichever shareholders are holding shares when the music stops will be along for the ride too.

Then again, the inside raiders who did it will be long gone with generational private island money and boards will be looking for the next 7.5 geniuses to burn the furniture to heat the house.

You're spot on.

Sad that the Spirit-buy thread is 30 pages and growing but this thread is still on page 1. I asked our CFO about buybacks during In Command but he didn't want to talk about them very much. He went with the "we're buying the stock at bargain prices" line of defense.

In 2019 alone Delta plans to buy back 1.3 BILLION in stock. And that's not from surplus cash just lying around, that number includes a $1B short term loan. For perspective, if Delta returned $1.3B to all 80,000 employees, that would be roughly $16k per employee.

"Companies tend to buy when their stock is high, and they're flush with cash."

Best discussion in the piece was how much the average Home Depot employee could have been paid (+$18k/yr) had the stock buyback money been used for salaries instead. (which netted the CEO $30 million more than his "meager" +$11million/yr salary paid out).

Also the points about being short sighted. That money really needs to be rolled back into product and brand.

In this industry, it's hard to tell congress with a straight face that "we can't compete with the Middle East", while simultaneously dumping TONS of cash into inflating top echelon management stock option payouts. It's just weak.

Great article. Thanks for posting.

I take it you haven't read past p1 of the "buy Spirit" thread. The last 29 pages are debating the merits of the Porsche 992 vs C8 Stingray. There are at least 5 pages devoted to the Mazda Miata and lots of bench racing.

The summary of Delta buying Spirit thread is that the Miata is a sports car, "no its not", "yes it is". The next drift will be a comparison of Porsche vs BMW vs Ferrari factory delivery experience.

Exactly. All getting more attention than CEOs enriching themselves at the expense of employees, shareholders and the economy at large.

How many CEOs drive Miatas?

So you’re in the it’s not a sports car camp. I kid.

It’s a great article that really highlights the ridiculous amounts of money that these buybacks burn, with minimal usefulness. When a company as large as Home Depot could almost double their employee compensation and the only show for it was executed compensation and a similar and probably lower stock price.

The most important and overlooked aspect of this is that the path we're on by the B-school geniuses will provide massive leverage to fool the peanut gallery into voting for nation destroying socialism as a masive overcorrection to their selfishness. But they don't care about that either, because that's why private island money is called private island money.

This article and many others like it should be widely circulated. The stock buyback scams will continue as long as the proletariat and unwashed masses are kept ignorant of the true intent. A shareholder resolution that adjusted the strike price of executive stock options relative the the size of the buyback is one step toward fixing the problem.