Let's say we own a company with 10 shares, I own one share, you own 4, and 5 are owned by others. Each share is worth $100 (to make it simple).
The company has $100 "to spare" - they could pay a dividend (give me $10, you $40, $50 for "the others") - but they'd be taxed on the income they made to be able to pay this, and you and I would be taxed receiving the dividend. We'd net out maybe $8, maybe $7 per share.
Or they could buy my share for $100, and retire it. I get the $100 (and pay capital gains tax unless it was in an IRA or otherwise not an issue). You now own 4 shares of a 9 share company, which is worth the same, but your percentage is a big bigger now.
Getting rid of the double taxation of dividends would likely slow down or end most buybacks; the main advantage is that they let the shareholders decide if/when they take the tax hit.
If you look at all the tech companies doing buybacks, usually the shares created for employee RSUs matches or exceeds the shares retired from buybacks.
Not in all cases, but many
Which is why GAAP earnings matter and not free cash flow
> If it’s gone forever, then… why? They just bought something and burnt it? Isnt that like a waste of resources?
You might have an easier time with some numbers.
A corporation called Hluska trades at a market cap of $100. Hluska has issued 100 shares. Now, let’s say that Hluska burns ten shares and the market cap stays the same. Now it trades at a market cap of $100 but it has 90 shares outstanding.
Stock holders will only lose stock if they sell stock. In that case, they will be taxed at a capital gains rate which is generally lower than the tax rate on income from dividends. So it’s a way to return capital to shareholders who want out in a tax effective way.
If it doesn’t work, it’s a waste of resources. Let’s go back to our example, that idiot Hluska was trading at $100 with 100 shares outstanding, burned 10 and now trades at a market cap of $80. In that case, yeah, it’s a waste of resources because each individual stock is worth less money post burn. But that doesn’t really happen very often. A better capitalized company than Hluska with its soaring $100 market cap should be able to withstand a burn event without crushing market cap by 20%.
For what it's worth, this is commonplace in Australia too. I feel like you're describing a general safe country thing. I've lived in Japan so I know it's probably one of the safest places in the world, but I feel like what this thread describes is more US/Canada/some Euro countries being particularly dangerous, and not Japan being uniquely safe.
Canada is not particularly dangerous, but it has a horrible case of being drowned out by American culture (which strongly influences Canadians' subjective perceptions of their environs), and having the same kind of problematic urban planning as the United States.
I think it's more high-trust than high-safety. Most American cities (and certainly suburbs) are quite safe, and have only been getting safer over the past decades.
And yet we are constantly bombarded with fearmongering around children getting kidnapped on every street corner, every hour of the day.
I'll absolutely agree that a place like Tokyo is safer for a child on their own than NYC or SF, but the gap isn't as wide as the mainstream media would seem to suggest.
Or walk home from school, or the playground, or wherever they are going from, through the middle of what in any NA city would be described as 'downtown', and would get CPS dispatched on speed-dial.
I am building an alternative to Builtwith for finding companies that use any technology (ie. crms such as Hubspot or Salesforce, or AI tools like Claude)
I am hacking on an alternative to Builtwith: bloomberry.com. Unlike Builtwith, you can search for companies that use any backend/backoffice product such as Jira/Atlassian, and Github (enterprise/free).
I went into a rabbit hole into how to detect paying Cloudflare customers (for a technographic product I am building in Bloomberry) and wrote up some techniques here.
Response header analysis were a waste of time (Cloudflare returns the same ones no matter what type of customer they are) so I had to resort to analyzing custom error pages, IP ranges, SSL certificates and more
I went deep inside a rabbit hole in trying to discover paying Cloudflare customers (for a technographic I am building in Bloomberry), and wrote up some tactics on how to detect if a conpany is a paying Cloudflare user.
Involves analyzing custom error pages, IP ranges, following redirects, etc.
1. You need something called a technographic product to get lists of companies that use a particular technology. Though these products are notorious for having stale data, so make sure you do some cross-checks to ensure it's somewhat accurate (IE. lookup their IPs and see if they're really hosted on AWS). I haven't used Builtwith in awhile, but they're the leader in that category. Bloomberry is another one.
2. As someone else mentioned in this thread: job postings can be useful. You particularly want to look at job postings that mention AWS AND FinOps. FinOps = basically engineering to save costs for cloud costs. That is a very high signal they're investing in someone who can help them save costs (albeit a lot of job postings these days are fake, so it's not a 100% sure signal)
3. Combine the first 2 methods with headcount data from Linkedin or Cloudflare radar traffic data to find companies that are using AWS and growing the fastest, or having huge traffic spikes. Those are probably highly correlated with the desire to want to reduce AWS costs.
Didnt think of the FinOps angle - thats a goodd one! The annoying thing about filtering by AWS mentions is that every other company seems to list all the clpud platforms like in a list, even if they use just one of them. Adding FinOps is a good additional filter in that case
Or do they then turnaround and give them to employees?
If its gone forever, then… why? They just bought something and burnt it? Isnt that like a waste of resources?
The stock market, still to this day is a very very strange thing…
reply