Discussion
Hey look at this
* Five for 50 - Anil Dash https://www.anildash.com/2025/09/05/five-for-fifty/
* How To Touch Grass https://www.kickstarter.com/projects/powerandmagic/how-to-touch-grass
* Why This Economy Feels Weird and Scary https://www.thebignewsletter.com/p/why-this-economy-feels-weird-and
* A Navajo weaving of an integrated circuit: the 555 timer https://www.righto.com/2025/09/marilou-schultz-navajo-555-weaving.html
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I do not understand.
If the compagny spends 500 k$ to buy back 500 shares, is not its new value 1000 k$ minus 500k$, i.e. 500 k$ ?
Then each remaining share should still value 1k$.
"Its shares should be worth less than before"
This seems misleading. The shares should only be worth less *if the number of shares are fixed*. which they aren't, in a buyback. When the company buys back half those shares, those shares stop existing. The 1000 share company only has 500 shares outstanding, post-buyback.
A company worth $500,000 with 500 shares outstanding will have a per share price of $1,000. The same company with 1,000 shares has a per share price of $500. 1/2
-there's actually a worse reason. Buybacks have tax advantages over dividends: Dividends are fully immediately taxed as income; buybacks are not due to cost basis (they can deduct what they initially invested), *and* capital gains tax is deferred to when the shares are sold.
Biden's IRA started to fix this by adding a 1% excise tax to them
(There are also other effects,like buying out certain shareholders concentrating control)
i've been hearing about these stock buybacks for quite some time now.
thanks for actually explaining why that was the case.
the bigger question i have is if a company cannot buy back its own stock, how does it regain its decision making capability from its investors?
ah so that's how it works.
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Stock buybacks are stock swindles: Raising the value of a stock without raising the value of the company.
https://mamot.fr/@pluralistic/115158154038333512
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Hey look at this
* Five for 50 - Anil Dash https://www.anildash.com/2025/09/05/five-for-fifty/
* How To Touch Grass https://www.kickstarter.com/projects/powerandmagic/how-to-touch-grass
* Why This Economy Feels Weird and Scary https://www.thebignewsletter.com/p/why-this-economy-feels-weird-and
* A Navajo weaving of an integrated circuit: the 555 timer https://www.righto.com/2025/09/marilou-schultz-navajo-555-weaving.html
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#5yrsago Political ads have very small effect-sizes https://pluralistic.net/2020/09/04/elusive-mind-control/#persuadables
#5yrsago CO asphyxiation accounts for half of Hurricane Laura deaths https://pluralistic.net/2020/09/04/elusive-mind-control/#co
#5yrsago Trump is a salesman https://pluralistic.net/2020/09/04/elusive-mind-control/#cialdinism
#5yrsago Physicists overestimate their epidemiology game https://pluralistic.net/2020/09/04/elusive-mind-control/#hubris
#1yrago Marshmallow Longtermism https://pluralistic.net/2024/09/04/deferred-gratification/#selective-foresight
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Yesterday's threads: Why Wikipedia works; and more!
https://mamot.fr/@pluralistic/115153094224120536
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My latest novel is "Picks and Shovels," a historical technothriller set in the Weird Era of the PC, about Ponzi schemes, techbros, and the dawn of enshittification:
https://us.macmillan.com/books/9781250865908/picksandshovels
--
My next nonfiction book is "Enshittification: Why Everything Suddenly Got Worse and What to Do About It," out from MCD/Farrar, Straus and Giroux on October 7:
https://us.macmillan.com/books/9780374619329/enshittification/
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A space for Bonfire maintainers and contributors to communicate
