The (Alleged) Seven Deadly Sins of Share Repurchase

Stock repurchases generate a great deal of heated commentary, as the following quotes attest:

Repurchases done on the open market, which constitute the vast majority of all buybacks, are nothing but manipulation of a company’s stock price. That should be illegal, but it is obviously not.

—William Lazonick, “The Curse of Stock Buybacks”1

Stock buybacks are eating the world. The once illegal practice of companies purchasing their own shares is pulling money away from employee compensation, research and development, and other corporate priorities—with potentially sweeping effects on business dynamism, income, and wealth inequality, working-class economic stagnation, and the country’s ...

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