Umm, what?

By definition, buybacks intend to punish the shareholders who sell and benefit those who don’t, which in RBS’s case involves the taxpayer.

Who is this idiot?

Simon Goodley is a Guardian business reporter

Like the Halal Butchery Reporter for Peppa Pig Weekly then.

Pre-announcement of buybacks shares are at one price. Post- at another. Those who sell into this new price have benefited just as much as those who hold on.

How could it be any other way? If those who sold into buybacks lost out they’d never sell into them, would they?

7 comments on “Umm, what?

  1. Because it’s capitalism so in their mind there has to be a victim.

    Even if everyone wins, there has to be someone who wins the least and there’s the victim to wave the shroud over.

  2. Agreed, AndyC. One must be seriously disturbed to think the board executes a buyback to “punish” someone.

  3. I’m not a farmer, but know most of the local ones. And sheep are shorn for health reasons. In a good year, the shepherd may break even on the process.

    A similar statement is true of woodland and forestry. For many years, the only way to keep deciduous woodland managed has been for the landowner to spend their own money on doing so – the value of the timber produced didn’t cover the cost of felling and hauling it away. The popularity of wood-burning stoves has changed the economic equation – the big straight trunks are still turned into planks, but the smaller ones can be profitably cut up and resold for firewood – which has changed the commercial balance*.

    * Even then it still requires grants from government towards the cost of managing the land.

  4. Buy-backs are commonly regarded as favouring institutional shareholders who get a chance to sell at a better price than they would get in the market over small private shareholders who do not. It should go without saying that if buy-back price is lower than the market price no-one will sell.
    Simon Goodley has got completely the wrong end of the stick. The beneficiaries of buy-backs are the sellers, not the holders.

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