Why Apple, Warren Buffett, And Others Use Stock Buybacks
Вставка
- Опубліковано 9 тра 2019
- Companies like Apple and Walmart purchase outstanding shares of their own stock in a practice known as buybacks. Over the last year there's been an increase in politicians questioning buybacks and whom they actually benefit.
In December 2017 President Donald Trump signed the GOP tax cut, which took effect the next month and lowered corporate tax rates from 35 percent to 21 percent.
The bill was supposed to spur corporations to reinvest those savings back into their own companies, thus creating jobs and employment opportunities and allow companies to pay higher salaries.
Many businesses spent more on internal projects, at least initially. But business investment slowed later in the year, as concerns about the economy grew.
At the same time, companies used their cash to buy back a record $1.1 trillion worth of their own shares, leading Democrats to propose legislation limiting buybacks unless companies raise their minimum wage to $15 and agree to other employee benefits.
Republicans like Senator Marco Rubio have suggested raising the capital gains rate to discourage buybacks.
SEC Commissioner Robert Jackson Jr. recently expressed his belief that most buybacks are better for executives than for shareholders. And that could give new momentum for the Securities and Exchange Commission to change the rules.
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
» Subscribe to CNBC TV: cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC Classic: cnb.cx/SubscribeCNBCclassic
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
#CNBC
#Apple
#Walmart
Why Apple, Warren Buffett, And Others Use Stock Buybacks
Investing in the stock market is the best option to make a passive income. Virtually all the markets are crazy, most people pay more attention to the shiniest position on the graph, I’m keeping a diversified portfolio.
This is financial advice and I never give financial advice: DONT LEAVE DURING THE BEAR. If you don’t want to invest…learn. If you don’t want to learn…build. If you don’t want to build observe. DO SOMETHING…other than leave. There is so much opportunity here. Take advantage!
CNBC videos about business and economics are getting better and better! Nice job. As the video described, the buyback is a very biased decision when executives own stock. They are practically transferring income to themselves by boosting prices and taking that opportunity to sell their stock. Using company resources to increase their gains. It seems that the dividends should increase for the shareholders that don't sell into buyback, so that could play a role too.
This feels like actual news... Is the TV with turning on again?
Lesson learned: When corporations buy back their own stock, it's a signal for investors and regulators alike to investigate. It may signal a healthy cash flow, or it may mask an underlying problem.
Stock buybacks used to be considered insider trading and therefore illegal. The Reagan administration changed that policy in 1982.
I'm really starting to feel this channel. Well done!
You guys did a pretty good job on this report. Kept away from the mud slinging, and did report some of the benefits to. Thank you.
Whatever team made this did a great job, earned a subscriber.
Thank you CNBC on this video. I finally understand what a buyback is. It’s just as I though but I wanted to be sure.
I'm an Australian investor in US stocks. This has been a great year for me. US taxpayer dollars have been pumping up my portfolio and paying me cold, hard cash in dividends. I can feel for any American who feels like that's unfair, but if you guys are going to give me free money then I'll take it.
Thank you for explaning the policy and not the politics of dems vs republicans
I was hoping to see Elizabeth :( still great work! Love it
Wow, this is journalism. This was actually a bit intellectually challenging to get through, but just the raw amount of facts, descriptions, research, put into this is, is incredible. Subscribed. I love how you showed left and right throughout the entire segment as well, leaving partisan ideology aside is so crucially important to understanding these economic issues, and it's why as an investor or even as a voting citizen that wants to stop recessions from happening again, you just can't watch news channels like Fox because you know they're trying to convey an ideology at the same time that they're mixing information. This was raw, unopinionated, facts and analysis. Absolutely love it.
Wow thanks CNBC you actually changed my opinion on this. This is great content!
Promote more stock-based compensation for all workers.. then buybacks will benefit employees as well.
I have a problem with government telling a business what to do. But executives selling their own stock after buy backs scream it should be illegal or some type of moratorium on selling after implementing share buy backs.
well if the
I just heard about this and now it has been recommended to me THANK YOU
Those companies today? crying for Federal money after spending all their profits in buybacks.