Last week Barry Ritholtz went on a rant about share buy-backs; Bad Buybacks.
He makes the point that companies are wasting billions on share buy-backs, instead of using that money for innovation. In his rant, he implies that directors are biased when considering when to do share purchases because creating extra demand for your stock also increases the value of insider share options.
One of the companies that he sets his sights on is Apple. His suggestion was, instead of spending tens of billions on buying back stock, what about buying Tesla, Netflix or Disney? Imagine how Tesla or Netflix would fly if they didn't have to worry about their growing debt burden?
We have had the same suggestion in the office for the last few years. In the case of Tesla, you would have Musk focussing on producing the best car in the world, and Apple would focus on funding it. It is not too late!