Conflating Shareholders: The stock buyback trend has been extremely hot in the last several years among major U.S. public companies. Multi-billion-dollar buyback programs are announced by management and the market often reacts positively without any analytical scrutiny. Buybacks are neither positive nor negative in a vacuum; the efficacy of the program is eventually borne out by whether the shares repurchased were attained well below their intrinsic business value. If so, accolades to the management; and if not, tomatoes. The bandwagon effect becomes far more dubious among large businesses when management conflates two species of stockholders, those Warren Buffett refers to as Continuing Shareholders and those he calls Departing Shareholders. This distinction has little relevance most of the time; however, whenever a company announces a stock buyback program, the importance becomes paramount. The distinction is critical in evaluating the efficacy...
Using S.E.C. filed documents, as well as fodder generated by financial publications, Veblen Capital finds, analyzes, and publishes on actions or assertions that are financially indefensible.