Skepticism on Buyback-Driven Stock Price Increases

19 days ago

Sven Carlin

"Now when it comes to the bottom line I think it is price manipulation so that the management gets their shares they can sell the options things like that. Nobody thinks in true long-term value creation. Maybe not even nobody thinks. They are simply not incentivized. Everybody wants stocks to go higher no matter the long-term cost of it. And therefore, I'm here arguing stupidly, sounds stupidly, only 1% of the market will get me, even if that's just Warren. However, if we have a recession, a crash, the changing of this everything bubble, the changing in the debt cycle, all these buybacks will be purged away and then the true value will emerge."

The speaker is critical of the widespread use of buybacks, arguing that they serve as a form of price manipulation benefiting management rather than long-term investors. He highlights that most buybacks occur at high prices and ultimately result in value destruction, warning that a market downturn could purge these artificial boosts.

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