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Khaleesi is coming to Westeros!!!
Any fish still awake and working? 😀
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Chief
So who else is at Hilton Orlando this week?
Saw this at a bargain store today
Pro
Rising Star
Chief
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On one hand, it sucks to get laid off. On the other hand, a company is not a charity. Sucks to be in that situation but this is how it goes.
Thanks for your thoughts. On the debt/liquidity conversation, it seems to take the position that stock buybacks decrease liquidity (an outlet for cash).
I agree with your premise that buybacks - and debt in general - create and fuel the western model of high risk high reward. Unfortunately, I think a missing element of that “risk” is who bears it, particularly on an environment where you choose to reward shareholders over liquidity.
On the buybacks vs dividend piece, I copy / pasted the relevant quote to what makes them different. Buybacks as a function of influencing stock price have a lot more implications in a world where information is assymetric than basic dividends
Rising Star
It’s not. I’ll never work for Raytheon
I think companies that do not invest in talent will not be well positioned for any resurgence in business post-COVID.
Rising Star
Consequences don’t exist for these giant firms unfortunately. I’d really like for it to have an impact but it probably won’t
Rising Star
OP I agree with your sentiment about buybacks in general, and I’d add that the nuances of their situation has to be understood too with heavily reduced demand and projections in comm aerospace combined with some natural shifting of headcounts post merger. What they should do is look at how Boeing dumped all their excess cash into buybacks forever and is now scrapping at the barrel as a lesson
Chief
Raytheon make almost all their money from government contracts. These share buybacks are screwing over all US taxpayers as Raytheon could provide the same gear at better prices or invest in R&D. The US will be less well defended as a result of this move.
IMO firms like Raytheon don’t even need to be private. There is no competition in their industry.
Doesn’t seem like it makes a whole lot of sense to be wasting cash by wiping out debt in such a low interest rate environment.
Pro
Everyone in this forum has gone out of their way to benefit from capitalism. You wouldn’t have these jobs otherwise. This is capitalism.
The objective is always maximizing efficient use of capital. If a company can make themselves more cost competitive by shedding employees, they should do that. I’d argue it’s unethical to do otherwise. What’s the alternative? Raytheon continues operating as a bloated machine; taxpayers fund that bloat via government contracts, and Raytheon is just an extension of the nanny state. That might last for a few generations, but it removes all pressure on folks to push themselves, to learn new skills, to innovate, etc. and eventually you end up with a company that gets outcompeted by a peer somewhere else (US, or somewhere else in the world). At that point the company is dead and ALL employees lose their jobs anyway. And we collectively lose a piece of our overall economic engine.
The process of forcing employees to retool and keep up might seem cruel and brutal, but the alternatives are worse. Take a peek at how Russia operates.
Yep. It’s cleaner and more transparent, as well.