A Few Rich Firms Are Fueling Record Buybacks, JP Morgan Says

If the criteria for "share demand" includes stock buybacks then it is in serious need of revision! The only "demand" related to a stock buyback is from the owner's of the stock that is being sold. A sale that avoids the scrutiny of "Mr. Market"! Where management pays to only a few very large, shareholders Cash out of the corporation's bank account, which represents the most "real" value of the corporation's Equity, which is owned by all of the shareholders of its Common Stock!! It might be appropriate for the remaining shareholders to wonder why?? And, especially to wonder why the corporate management suite and the Board of Directors thought it was in the best interests of the corporation to facilitate the exit of those very few large shareholders, by utilizing the corporation’s “Cash in the bank” (and sometimes even borrowing to have enough cash)?? Do you think it could have anything to do with how the large amount of shares bought back voted in the most recent proxy on the compensation packages of corporate management and the Board of Directors?? Which makes me ask, does corporate management and the Board of Directors have a fiduciary responsibility to all the common stockholders?? Remember, ultimately, the only thing the remaining common stockholders own is the dissolution net cash-value of a corporation’s “Equity”! A stock buyback is “accretive” to the remaining shareholders percentages of ownership, BUT NOT TO THE VALUE OF THEIR OWNERSHIP. Because, when that accreted, new larger percentage is multiplied times the new lesser “Equity”, THE $$VALUE IS EXACTLY THE SAME AS BEFORE THE STOCK BUYBACK OCCURRED. It would have been far more appropriate if the stock buyback payment out of the corporate bank account had instead come out of “Mr. Market’s” bank account. Because: a. It didn’t purchase any new assets or pay any bills/liabilities/debts; b. It didn’t pay any costs of operations; c. It didn’t benefit all stockholders; d. It will no longer be available to protect the remaining common stockholders from losing everything in a crisis requiring government “bailouts” (e.g., as happened in 2008 to all the common stockholders of GM, and those of Lehman Brothers, and other companies)! Speaking as a retired CPA: There is no value attributed to the stocks bought back, because they cannot be reissued (i.e., re-sold) without an extensive paperwork and an approval process. And what "Mr. Market" would pay for them is anybody's guess! Consequently, accounting rules simply reflect the buyback payout as the reduction in cash that has occurred, and reflect the corresponding reduction, or loss, of the cash asset from Equity. No value can be assigned to a buyback’s shares, they aren’t considered to have any discernible asset value - they often become part of un-issued stock in the corporate "Treasury"! Let's face it, if those billions of dollars of stock buybacks had been left in those companies (and "Mr. Market" had taken care of the buying of the stocks sold in those buybacks), those companies would have billions more in "Cash" equity, a real positive in terms of justifying a stock's per share market value! If we consider the buybacks over the past 20+ years, we are talking about trillions of dollars - of additional support, and protection for the investment made by the individual, or IRA, or 401k, or pension plan or ... you get the idea.!! The various indicators that the current market is over-priced, at a level last seen in 1929, probably wouldn't be there?