Subject: Re: Chris Bloomstran ,
As an aside---
Just a reminder that a share buyback is not in any way a distribution to shareholders. Yes, they mailed out that money, but it didn't go to shareholders, it went to people agreeing no longer to be shareholders. Buyback money isn't a "yield" in any sense of the world, the way some people portray it. For an investor it's just capital allocation, not different from the company purchasing shares of a different company. In neither case does the shareholder get that money to spend.

Jim

yeah yeah.. Let's just agree that the money "left the company" and that the money wasn't needed to reinvest to create the company left over today.

Warren can decide if he likes their capital allocation decisions or not (I'm sure at some price he would be less smitten with Tim Cook repurchasing Apple shares).

But the magic for Warren is that the $100 billion + per year is not needed (hyperscalers with gazillion dollar AI datacenter budgets appear to disagree, we'll see if Apple is making a miscalculation about the future).

I own some companies that own their own stock as an investment. It isn't the norm. Fairfax Financial does it in the form of a derivate - a Total Return Swap - with several large Canadian banks (who have hedged their exposure) as counterparties. Cash flows back and forth depending on the performance of the share price during the period. This method avoids the "investment" being classified as treasury stock.

Another of them, which shall remain nameless since it is one of the most actively reviled companies on earth, owns a significant number of un-cancelled shares through an LP investment. The company's management gets to vote those uncancelled shares (which were purchased with shareholders' capital), making it a controlled company. GAAP counts the companies look-through pro-rata share of its own shares as treasury stock and their value does not appear on the balance sheet.

Gains and losses in an issuer's own shares are not taxable in the USA, by the way. I believe Fairfax's Total Return Swaps are taxable.

The fact is that any company can do a secondary stock offering in the future at a different price, so it doesn't make a whole lot of functional difference if the shares are cancelled or not (besides voting and a few other double-dip perks).

Anyway, I went off on a tangent there.

Apple didn't need the money. You say it wasn't returned to shareholders but it certainly left the company. Certainly distorts return on equity when capital leaving the company methodically reduces shareholders equity towards zero and eventually below.