French companies benefiting from state aid can't buy back shares

It cannot be clearer : "Ils devront être suspendus quand les sociétés bénéficient des reports d’échéances fiscales et sociales". The three words "devront être suspendus" explicitly indicates it will be illegal. And the terms "les sociétés bénéficiant des reports d’échéances fiscales et sociales" say that any company benefiting at least from the most basic state-funded help package (related to COVID) is targeted.

> In some indistries, that means thousands of people without work, and hundreds of other companies in the supply chain going bankrupt, and even more people without work.

A popular counter-argument is that governments should plan to spend money on unemployment relief for individuals if it looks like a lot of big companies won’t make it. Let companies fail but cushion the blow for people affected.

There is nothing weird or tricky about buybacks, and the mechanism is pretty obvious and intuitive.

A company can issue new shares and raise money when they need it.

A company can buyback shares when they have extra money they can't efficiently use (see: AAPL, MSFT, GOOG).

There is absolutely nothing nefarious about this mechanism, and if tax treatments vary blame the government (don't hate the playa, etc).

Buybacks are only a problem when cash-poor companies do buybacks. Either they're depleting a small contingency reserve, or they're even utilizing debt to do it.

Great food for thought, thanks for this.

These two paragraphs have all the key concepts IMHO (there's even redundance). You understand this, you have a comprehensive 10,000ft view.

> “Stock buybacks made as open-market repurchases make no contribution to the productive capabilities of the firm. Indeed, these distributions to shareholders, which generally come on top of dividends, disrupt the growth dynamic that links the productivity and pay of the labor force. The results are increased income inequity, employment instability, and anemic productivity.”

> “Stock buybacks made as open-market repurchases make no contribution to the productive capabilities of the firm. Indeed, these distributions to shareholders, which generally come on top of dividends, disrupt the growth dynamic that links the productivity and pay of the labor force. The results are increased income inequity, employment instability, and anemic productivity. [...] because of corporate tax cuts, in 2018 taxpaying households were burdened with about 38% of the combined government and business debt that enabled corporations to do buybacks.”

I'm a fierce capitalist, I love human sweat and I admire those who create value. Whether Jane the CEO or Rob who makes delicious cookies, value is value, value is good, value is shared (or should be).

Stock buyback is stealing though, plain and simple. It's a legally, cleverly twisted, inverted Robin Hood mechanism at the private level. It's basically everything that's wrong with finance in abstraction of value.

Expect tighter regulation promoted by Central Banks in the 2020s or we're heading for another income inequity-snafu. For those who haven't read much economy, the gist is this: not enough income inequity, and society stagnates (underperforms relatively to others under comparable conditions). Too much inequity, and the system chokes on itself (not enough consumer liquidity ⇒ you know...— and if you don't, think: consumer liquidity is the difference between pre-WWII and post-WWII global economies.

I'm not an economist and absolutely not an expert (I only did 2 short years of econ in university, and self-taught some financial-survival skills). But this is like 101 to me, the basics of a macro-econ intro. It's not even controversial, or hasn't been since post-Keynes basically.

If traders credibly believed that a stock's value was going to 0, then the price would already be 0. Just saying in advance that your scheme was about to be implemented would crater the price before any new stock was sold.