How American corporations squandered $538 billion in 2018
Here's a story about how U.S. corporations completely wasted $538 billion in 2018.
You've probably heard of stock buybacks by now: These are where companies repurchase their own stock from shareholders. The practice was actually forbidden by federal regulations until a rule change in 1982, and it's taken off like a rocket since. Between 2010 and 2017, U.S. companies dumped hundreds of billions into stock buybacks each year.
But 2018 will probably be top of the heap. In just the first nine months of this year, companies on the S&P 500 spent $538 billion on stock buybacks, the Wall Street Journal reported. That's a 52 percent increase over the same period in 2017, and according to the Journal it's on track for a full-year record.
That avalanche of money was helped along by the tax cut package President Trump and the Republicans passed back in December 2017, which was a massive windfall for corporate coffers. In fact, stock buyback announcements — as opposed to stock buybacks actually carried out — topped $1 trillion this year, an all-time record.
Here's the gag: By dropping at least $538 billion to buy back their own shares, U.S. companies overpaid by billions of dollars.
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https://www.msn.com/en-us/money/savingandinvesting/how-american-corporations-squandered-dollar538-billion-in-2018/ar-BBRDzhx?li=BBnbfcN