B,B & Beyond, more Vulture Capitolism

[edhopper]

https://finance.yahoo.com/news/bed-bath-beyond-how-stock-buybacks-undermined-the-company-154202427.html

Would you believe that Bed and Bath has spent more than $11.7 billion to buy back almost three quarters of its own stock? At an average cost about 15 times the stock’s current price? And that only a couple of months ago, when it was already in desperate financial shape, it kept buying back its shares? (For no rational reason, as far as I can tell.)

According to its financial filings, Bed and Bath has spent $11.73 billion buying back its own stock since 2004 at an average cost of more than $44 a share. The stock’s price, when last I looked, was a smidge under $3.

Using company money to enrich major shareholders and themselves. Pushing the company into bankruptcy. On Wall Street, stealing is legal.

[bucolic_frolic]

1. Management believed in growth, so buybacks would concentrate earnings

Unfortunately when there are losses, buybacks concentrate them too.

I never bought anything in BBBY. Went in a few times and was shocked at the prices. I found the high ceilings, narrow aisles, sales pestering positively claustrophobic. Nothing lost if they went kaflooey. More rampant consumerism and trinket capitalism on display.

[Goodheart]

2. Sorry, but your post doesn't make any sense.

"Using company money to enrich major shareholders and themselves" betrays a lack of understanding of what corporations and shareholders are. The shareholders OWN the company, they have every right to hand out the company's money, which they ALREADY OWN, to themselves.

[edhopper]

3. And by doing that

they bankrupt the company and put all the workers out of work.

That is why it is called Vulture Capitalism. I perfectly understand how this late stage capitalism sucks the life out of society to enrich those at the top.

[Goodheart]

5. No.

I'm sorry, but you don't understand balance sheets and/or corporations.

Bankruptcy occurs when a company can't meet its liability obligations. A company with little cash relative to other assets doesn't necessarily mean it will go bankrupt, and most often does NOT mean that it will. Accounts receivable and inventory that can turn into revenue can both be monetized (through collections and sales) into timely cash to meet obligations on time.

[edhopper]

6. And using cash on hand

to enrich others and make the company poorer and unable to weather down periods bankrupts companies.

Now tell me how Romney made KBToys and Toy-R-Us thriving companies.

[Goodheart]

7. Once again, no.

Cash on hand belongs to the shareholders. Giving cash to the shareholders is giving them something they already own. Paying cash to shareholders doesn't make anybody richer or poorer.

Toys-R-Us didn't go out of business because of stock buybacks. It went under because the market changed. First, WalMart massively undercut them and then online toy sales finished them off.

Now, I'll tell you when stock buybacks are wrong: when the company borrows cash to do it, knowing all the while that its business prospects are poor. When it's a loan or grant from the government that's especially immoral.

[edhopper]

8. Sure

all for the good of the company.

https://www.democraticunderground.com/100217859503


Qasim Rashid, Esq.
@[e-mail]

Bed Bath & Beyond has filed for bankruptcy shortly after spending $1B in stock buybacks & cash payments to shareholders. Employees of 20 years got 0 notice & $0 severance.

It wasn't inflation. It wasn't labor cost. It is 100% corporate greed.

Tax billionaires. Unionize workers. Protect our economy.

[Yo_Mama_Been_Loggin]

4. Brilliant!!!!!