Stock buybacks function as the opposite of capital raises. It lowers the amount of cash the business has on hand, so that hardly keeps the business afloat. It's also effectively a transfer of public funds to private shareholders--about the clearest form of "corporate welfare", largely from the working stiffs (or at least the ones who pay taxes) to the ownership class, out there. The better idea is to use the bailout $ for operations, payroll, rent, op-ex, etc. to get through the tough times, not to manipulate the stock price up to bonus the shareholders at the public's expense. I'd prefer our public $ not be used for corporate share buy backs. I would think most folks would agree, but there are counter-arguments.
The best counter-arguments I can muster for the sake of argument (and I don't agree with them] are as follows: the company's stock has been hammered so hard that the market treats it like the plague. Lender's won't touch it, suppliers won't give credit, it's COD only, and even customers are wary of buying the products of a near-bankrupt entity. Stabilizing the stock might get some market confidence back in the ailing company. It also might allow the company to do some effective equity capital raises at higher share prices. [to me, that's not a very convincing argument to use public $] And stabilizing the stock market as a whole to prevent complete collapse may be another argument, although if an otherwise good company's shares drop off a cliff, investors looking for value often sweep in and buy it back out of the abyss.
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Last edited: Mar 25, 2020