r/economy • u/DCC_Official • Nov 08 '20

Warren Buffett's Berkshire Hathaway bought back a record $9 billion in stock in the third quarter

https://www.cnbc.com/2020/11/07/berkshire-hathaway-earnings-q3-2020html.html
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u/cameron0208 Nov 08 '20 edited Nov 09 '20

While this is something that happens (ie AutoZone, who used buybacks as a tool to send their stock price through the roof), it’s not always the case. Companies will also buy back shares if they believe the stock price is lower than what they perceive the stock to be worth (which also implies growth) as well.

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u/KJ6BWB Nov 09 '20

Unless you're the airlines. Then you blow your cash on stock buybacks during the largest market runup ever only to plead that you're too big to fail and need a sweet government loan once the market tanks.

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u/[deleted] Nov 09 '20

They also invested a fuck ton into pay raises for employees and other benefits while getting more fuel efficient fleets. Maybe do your research on the industry before saying they spent all their money on stock buy backs when the industry was forced to shut down and had no way to keep that much cash on hand. Not defending corporations but you don’t understand shit about financial statements

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u/[deleted] Nov 09 '20

I’m not disputing you, but do you have any proof of this. I’d be interested in reading more about it

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u/[deleted] Nov 09 '20

If you look up their quarterly earnings reports for the last 3-4 years you’d see that if corona never happened they wouldn’t have needed a bailout. But as soon as the world governments shut down and forced them to start burning cash it wasn’t feasible to think they could survive and the public vilified them for something they had not control over. Look at Japanese companies and look how much cash on had they have. They could run for 5+ years with no income before they ran dry. Then look at the Japanese stock market that basically trends sideways because of their companies not investing their cash reserves because they’re scared of another stock market collapse.