Thread regarding ExxonMobil Corp. layoffs

No Stock Buybacks

EM is forecasting record profits. In profitable times past, EM would throw the profits down a pit called Stock Buybacks. The stock price would not be affected, so basically just erasing profit and erasing company value at same time.

Going into this recession, EM needs some money saved up to not just survive, but to thrive. Equipment and services are cheapest in a downturn. Rig rates drop and fabrication rates lower. The downturn is the time to grow the business, not wait until all rates peak again to start spending money again.

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Post ID: @OP+1hAdS96P

11 replies (most recent on top)

Stock buybacks are a scam to maintain a fairly constant number of shares outstanding even after granting millions of shares to the big bosses for their bonuses.

And all companies do buybacks completely backwards. Times are good, stock price is sky high, they back up the truck and buyback tons of shares. Times are tough, stock price is in the dumps, they won't buy a single share.

Corporate mensas apparently never heard of buy low / sell high.

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Post ID: @9ljp+1hAdS96P

Laughable that EM would throw all its profits away with a justification of borrowing less money in next downturn.

Just keep $20 billion in savings and eliminate the potential future need for borrowing.

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Post ID: @7rme+1hAdS96P

Buybacks reduce the amount that has to be paid in dividends (by reducing the number of shares), so reducing the amount that would need to be borrowed to continue paying the dividend if there is another downturn.

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Post ID: @7eoq+1hAdS96P

Cut expenses , headcount and salaries for the bottom 50%, then increase dividends and stock buybacks. Good for the shareholders while getting rid of low performers is good for the company

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Post ID: @4qgr+1hAdS96P

Looks like nobody knows, OP.

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Post ID: @1fom+1hAdS96P

If must buyback stock, at least wait until price drops. Buybacks are always at the peaks of prices.

Should have bought back when price was $35, not $85.

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Post ID: @1jwd+1hAdS96P

It could good very bad short term but in the long term it wii be great.

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Post ID: @cnb+1hAdS96P

It could good very good short term but in the long term it won’t be that good.

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Post ID: @afz+1hAdS96P

Seems poor judgement to spend billions on stock buybacks then have to borrow to pay dividends during upcoming recession.

Need to keep just a little more money in savings than we had to borrow in most recent downturn.

If absolutely must do buybacks, wait until stock price tanks again. EM seems to only do buybacks at peak stock price. When stock drops below $35 again, trigger those buybacks.

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Post ID: @qos+1hAdS96P

Perhaps short term, but not always good business in the long term.

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Post ID: @byw+1hAdS96P

Mathematically, buying back stock always will generate a higher stock price than if it wasn't done. Plans are already in place to buy back billions.

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Post ID: @fet+1hAdS96P

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