Warren's Conditions for Bailouts

[Ivytalk]

All this blather about the immorality of stock buybacks amuses me, as a corporate lawyer. The buybacks are voluntary on both sides. If stockholders believe the offered price is unatttractive, they can turn down the offers and continue to own their shares. I have done that at least twice in my portfolio. This is not a mandatory redemption situation. If you call the corporations immoral for making the offfers, you’re calling the stockholders immoral for accepting them.

[Skjellyfetti]

It's not stock buybacks people take issue with. It's taxpayers funding them. Surely a big-L Libertarian would agree?

[Ivytalk]

I knew you’d strike the dry fly. If you don’t like the corporate decisions, vote out their boards. There are plenty of liberal pension funds that would join you in a proxy fight.

[AZGrizFan]

I can assure you the list of patents and inventions coming from those two industries ALONE dwarf any list of meaningful inventions/innovation coming out of your beloved federal government (which may very well be the null set).

Banking:

Mobile banking (Deutche Bank)
Remote deposit capture (invented and patented by USAA)
ATM's (Barclay's Bank, London)

Those three alone have done more for civilization than any government. Maybe even the TOTALITY of government.

Deutschebank.

Saviors of western civilization as we know it

Yep. Exactly what I said.

[CID1990]

I knew you’d strike the dry fly. If you don’t like the corporate decisions, vote out their boards. There are plenty of liberal pension funds that would join you in a proxy fight.

That’s right Ivy

Snatch his lips out


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[Chizzang]

All this blather about the immorality of stock buybacks amuses me, as a corporate lawyer. The buybacks are voluntary on both sides. If stockholders believe the offered price is unatttractive, they can turn down the offers and continue to own their shares. I have done that at least twice in my portfolio. This is not a mandatory redemption situation. If you call the corporations immoral for making the offfers, you’re calling the stockholders immoral for accepting them.

under this ^ framework
What's good for the goose scenario - a board should never ask for federal bailout money then ?
because they chose to squander their available cash on stock manipulation schemes

right..?

[UNI88]

All this blather about the immorality of stock buybacks amuses me, as a corporate lawyer. The buybacks are voluntary on both sides. If stockholders believe the offered price is unatttractive, they can turn down the offers and continue to own their shares. I have done that at least twice in my portfolio. This is not a mandatory redemption situation. If you call the corporations immoral for making the offfers, you’re calling the stockholders immoral for accepting them.

under this ^ framework
What's good for the goose scenario - a board should never ask for federal bailout money then ?
because they chose to squander their available cash on stock manipulation schemes

right..?

Which airlines are best financially prepared to weather this storm? Why are they better prepared? What should the penalty be for the leadership of airlines that are not as well prepared?

[Chizzang]

under this ^ framework
What's good for the goose scenario - a board should never ask for federal bailout money then ?
because they chose to squander their available cash on stock manipulation schemes

right..?

Which airlines are best financially prepared to weather this storm? Why are they better prepared? What should the penalty be for the leadership of airlines that are not as well prepared?

no penalty... just regular old free-market capitalism
run out of money because you spent it all on stock scheming - you're out of money bye-bye see you later

it's a risk scheming to control stock value and spending all your free capital on gimmicks
what does Las Vegas do when you're at the table and playing risky schemes and lose all your money..?

[LeadBolt]

under this ^ framework
What's good for the goose scenario - a board should never ask for federal bailout money then ?
because they chose to squander their available cash on stock manipulation schemes

right..?

Which airlines are best financially prepared to weather this storm? Why are they better prepared? What should the penalty be for the leadership of airlines that are not as well prepared?

In the government world the penalty would be a higher subsidy for making bad decisions.


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[Ivytalk]

All this blather about the immorality of stock buybacks amuses me, as a corporate lawyer. The buybacks are voluntary on both sides. If stockholders believe the offered price is unatttractive, they can turn down the offers and continue to own their shares. I have done that at least twice in my portfolio. This is not a mandatory redemption situation. If you call the corporations immoral for making the offfers, you’re calling the stockholders immoral for accepting them.

under this ^ framework
What's good for the goose scenario - a board should never ask for federal bailout money then ?
because they chose to squander their available cash on stock manipulation schemes

right..?

I don’t favor bailouts for poor business decisions. That’s been my position since well before 2008.

[kalm]

under this ^ framework
What's good for the goose scenario - a board should never ask for federal bailout money then ?
because they chose to squander their available cash on stock manipulation schemes

right..?

I don’t favor bailouts for poor business decisions. That’s been my position since well before 2008.

So let’s just bail out the businesses that made sound decisions?

[UNI88]

Which airlines are best financially prepared to weather this storm? Why are they better prepared? What should the penalty be for the leadership of airlines that are not as well prepared?

In the government world the penalty would be a higher subsidy for making bad decisions.

Sent from my iPhone using Tapatalk

My guess is that Southwest and Alaska are the two airlines best prepared to weather this storm. They have cash reserves and other assets.

If Chizzy is right, the other airlines spent their cash on stock buybacks that propped up their share price and EPS and resulted in fat bonuses. Now they want the federal government to bail them out for choosing short-term personal gain over the long term viability of the company they were responsible for leading. Any executive of a company that received bonuses that can be tied to a share buyback within the past 10 years should at a minimum have to refund all those bonuses with interest and any federal bailout should be reduced by that amount. If they really want help then they can put their money where their mouth is too.

[Chizzang]

In the government world the penalty would be a higher subsidy for making bad decisions.

Sent from my iPhone using Tapatalk

My guess is that Southwest and Alaska are the two airlines best prepared to weather this storm. They have cash reserves and other assets.

If Chizzy is right, the other airlines spent their cash on stock buybacks that propped up their share price and EPS and resulted in fat bonuses. Now they want the federal government to bail them out for choosing short-term personal gain over the long term viability of the company they were responsible for leading. Any executive of a company that received bonuses that can be tied to a share buyback within the past 10 years should at a minimum have to refund all those bonuses with interest and any federal bailout should be reduced by that amount. If they really want help then they can put their money where their mouth is too.

[Ivytalk]

I don’t favor bailouts for poor business decisions. That’s been my position since well before 2008.

So let’s just bail out the businesses that made sound decisions?

Once you start with bailouts, where do you stop?

[kalm]

So let’s just bail out the businesses that made sound decisions?

Once you start with bailouts, where do you stop?

Right it’s hard to define. It’s almost more of a morality question. Good businesses make poor decisions and take risks that don’t pan out all the time.

[Ivytalk]

This may finally be the event that causes large businesses (meaning public companies) to start focusing on the longer term, beyond the quarterly financial results. Just brainstorming here. If you eliminate the quarterly disclosure requirement (10-Q) and just require annual reports (10-K) and prompt disclosure of unusual material events (8-K) , would that be enough for efficient markets to function?

[Ibanez]

Is it benevolent?? Lol


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How about “inefficiently” ?

My man...

[kalm]

These guys could use some help too!

https://www.cnbc.com/2020/03/20/private ... nding.html

[CAA Flagship]

This may finally be the event that causes large businesses (meaning public companies) to start focusing on the longer term, beyond the quarterly financial results. Just brainstorming here. If you eliminate the quarterly disclosure requirement (10-Q) and just require annual reports (10-K) and prompt disclosure of unusual material events (8-K) , would that be enough for efficient markets to function?

No. I think the longest time you could go is 6 months. Investors need visibility. And it is important for companies to see the effectiveness of other companies' strategies in order to remain competitive.

[GannonFan]

This may finally be the event that causes large businesses (meaning public companies) to start focusing on the longer term, beyond the quarterly financial results. Just brainstorming here. If you eliminate the quarterly disclosure requirement (10-Q) and just require annual reports (10-K) and prompt disclosure of unusual material events (8-K) , would that be enough for efficient markets to function?

No. I think the longest time you could go is 6 months. Investors need visibility. And it is important for companies to see the effectiveness of other companies' strategies in order to remain competitive.

I agree, I'm fine with shorter windows for companies to tell us how they're doing, I like transparency. If a business is teetering, I don't want to have to wait 364 days to find that out, the sooner the better.

The stock buyback thing is such an incredible red herring in this. Are we going to make dividends illegal now as well? Ivy was right, stock buybacks aren't some coerced activity, if you have stock and don't want to sell it you don't have to. And if you do want to sell it, odds are you are investing that money anyway so money that wasn't doing anything useful for the first company is now being used productively for other companies. I'm fine with putting a provision in there that for 5 years or 10 years there are no stock buybacks - that should answer the concern about immediately profiteering from government money. But the forever thing is just straight up kooky. That's a technical term.

[CAA Flagship]

No. I think the longest time you could go is 6 months. Investors need visibility. And it is important for companies to see the effectiveness of other companies' strategies in order to remain competitive.

I agree, I'm fine with shorter windows for companies to tell us how they're doing, I like transparency. If a business is teetering, I don't want to have to wait 364 days to find that out, the sooner the better.

The stock buyback thing is such an incredible red herring in this. Are we going to make dividends illegal now as well? Ivy was right, stock buybacks aren't some coerced activity, if you have stock and don't want to sell it you don't have to. And if you do want to sell it, odds are you are investing that money anyway so money that wasn't doing anything useful for the first company is now being used productively for other companies. I'm fine with putting a provision in there that for 5 years or 10 years there are no stock buybacks - that should answer the concern about immediately profiteering from government money. But the forever thing is just straight up kooky. That's a technical term.

Stock buybacks are a necessary thing for many companies. Especially for companies like biotechs where there are often several secondary offers in order to stay solvent in an industry where there is a high frontload cost before you get to positive cashflow.

The question about buybacks for companies that receive government backing is a good one. I think its reasonable for the government to put stipulations on any public support a company gets, until they satisfy the conditions of the agreement. After that, they can do what they want to do. Some conditions of the agreement could be longer, or even forever. But buybacks are a risk that should not be taken with public support until the public is made whole.

[houndawg]

So let’s just bail out the businesses that made sound decisions?

Once you start with bailouts, where do you stop?

Where the corporation ends and the ordiary citizen begins

[Chizzang]

You guys pretending that stock buybacks are anything more than boards lining their pockets is hilarious...
95% of Stock buybacks have one purpose and one purpose alone



they were made difficult to do and mostly illegal for a reason after the Great Depression stock crash that flipped this country upside down
and yet here we are with companies posting significant billions in annual profit and no cash on hand

and now the American Tax Payer must suffer for it
and you three - the local corporate socialists - chime in to explain how this all makes perfect sense

Jezus titty fucking christ

[GannonFan]

You guys pretending that stock buybacks are anything more than boards lining their pockets is hilarious...
95% of Stock buybacks have one purpose and one purpose alone



they were made difficult to do and mostly illegal for a reason after the Great Depression stock crash that flipped this country upside down
and yet here we are with companies posting significant billions in annual profit and no cash on hand

and now the American Tax Payer must suffer for it
and you three - the local corporate socialists - chime in to explain how this all makes perfect sense

Jezus titty fucking christ

Such drama. Tell me how putting a 5 or 10 year block on companies accepting govt money from being able to do stock buybacks in that period, and then being able to do stock buybacks like any other company out there after that, is a bad thing? It's not taking government money and then going directly into the pockets of board members, heck, most of those board members won't be there 10 years from now. Heck, if you wanted, you could make a provision that the company couldn't do a share buyback as long as any senior officers in the company at the point of the bailout were still owning shares in the company itself. That would alleviate the concern about people trying to pocket the government largesse. See, solutions do exist. You're such a shrill for the SJW mafia that sometimes your fanaticism gets in the way of common sense. We need more rationale thought and less drama, but by all means, continue shouting your righteousness.

[Chizzang]

You guys pretending that stock buybacks are anything more than boards lining their pockets is hilarious...
95% of Stock buybacks have one purpose and one purpose alone



they were made difficult to do and mostly illegal for a reason after the Great Depression stock crash that flipped this country upside down
and yet here we are with companies posting significant billions in annual profit and no cash on hand

and now the American Tax Payer must suffer for it
and you three - the local corporate socialists - chime in to explain how this all makes perfect sense

Jezus titty fucking christ

Such drama. Tell me how putting a 5 or 10 year block on companies accepting govt money from being able to do stock buybacks in that period, and then being able to do stock buybacks like any other company out there after that, is a bad thing? It's not taking government money and then going directly into the pockets of board members, heck, most of those board members won't be there 10 years from now. Heck, if you wanted, you could make a provision that the company couldn't do a share buyback as long as any senior officers in the company at the point of the bailout were still owning shares in the company itself. That would alleviate the concern about people trying to pocket the government largesse. See, solutions do exist. You're such a shrill for the SJW mafia that sometimes your fanaticism gets in the way of common sense. We need more rationale thought and less drama, but by all means, continue shouting your righteousness.

I missed that part... I was ranting at Flaggy (sorry Ganny)