Thread regarding Shell Oil layoffs

Buy backs are done by leadership with lack of a long term plan. When done at the top of the market, they do a lot of damage to the companies finances with no benefit for anyone. As the original post said, they’ve been completely out of control and that cash could have been usefully deployed in the next downturn.

This colossal waste of money and damage to the companies balance sheet means Wael should go, but he has a backup plan - another round of layoffs just might distract everyone long enough for him to survive and get another $20 million.

When buybacks outpace dividends and still do nothing for the share price, it stops looking like strategy and starts looking like corporate self-care with no results.

@19f+1jqptfw34

I think the stock can still get down to $56-$57 which is another 9%-10% from the current price. There is still a lot of uncertainty around how the tariff issue will be resolved. Also oil is currently oversupplied.

Notice that there were no buy backs when the stock was in free fall, because that would show that the buy back literally does nothing except make money disappear.

@w8+1jqptfw34

wow good point. i think i know what the leadership is gonna do about it.

more cuts and buy back more stock! the stock is about to pop you guys! any minute now! we’re so undervalued!

@w8+1jqptfw34

Everyone knows what Wael will do to get that money back? $60 billion of layoffs incoming!

I just gotta point out that the US tariffs ostensibly caused the stock to fall 12-15%. Buy back was 0% protection. $60 Billion flushed away.

hey great news everyone since the time that this post went up the official word is out that 🐳 🦢 wants to sell the chemicals business

do you think he agreed to finish monaca just so he could sell it to buy even more stock that doesn’t ever go up? hahahaha you can’t make this sh-t up. what a clown leadership team. 3 ring circus senior LT.

I meant to agree with you Post ID: @jz+1jqptfw34 & Post ID: @jt+1jqptfw34, but say that leadership shouldn't do nothing, but should listen to their technical staff and stick to the plan. The failure was not listening and then making a bad decision.

What would be better would be having competent senior leaders who are both business savvy and technically sound. I think they are following their box like training and comparing to studied business models but trying to experiment trying something new and overruling the informed staff.

Post ID: @jz+1jqptfw34 & Post ID: @jt+1jqptfw34
Maybe it is listening to the advice of experts on the technical rather than doing nothing. It would actually have been sticking with the plan and using the profits to purchase resources rather than purchase stock to cancel it. ( Meaning do nothing with it except making it disappear.)

@jt+1jqptfw34

lmao. doing nothing but harvesting energy - too powerful of a strategy for a decade of leadership team of an energy company to fathom

Just imagine, if we had leaders without MBA’s or Mackenzie on speed dial.

Just doing nothing we would have Guyana, Permian and Appalachian plus instead of buy backs we could have bought one off

Occidental
Hess
Andarko
….

What would the share price be now with all that …

Wonder why they don’t pay down debt further? It is already at a very comfortable level but still higher than ExxonMobil and Chevron that are virtually debt free.

I am not casting blame on our exploration workers... their decision makers maybe.
There hasn't been something to invest that $60 billion into except Guyana, Permian, or Appalachia. But senior leaders either sold those cheaply or walked away for free. It is not like they didn't have options, they just made the wrong choices again and again and again repeatedly. Would you invest billions into any of the other assets we already hold, not if you're aiming for profit.

So, what is the alternative , prospect on the stock market. Who're ya gonna pick... Why Shel of course, making the wrong decision with plenty of great options.
What we really need is a new division called stock market exploration. Just stop buying Shel. Any indexed fund would out perform. Yes, I apologetically say since we're already spending $13 billion a year on buying stock a major component of our business is as a financial brokerage, we should buy better investments that don't disappear or go to cancellation when we buy it.

Shame management are just lazily buying back shares with profit. If they had some vision they could use it to generate future value.
The only ‘vision’ is selling assets cheap and cutting roles.

it’s super european to ask if you have your noticing license

@dp+1jqptfw34

Do you mean senior managers are gaslighting us and telling us we aren’t smart enough to see the signs?

Do you mean all Wael has done is pay off investors and lining everyone’s pockets at the top 1% at the expense of our livelihoods?

It’s an all too familiar story. It’s almost as if private equity has taken over the company and we are all on a ticking clock

Page 244 of the 2024 annual report shows that over the last 3 years Shell has bought $46.9 billion worth of shares. The total equity of Shell is ~$220 Bln... they bought 21% of Shell but the price went nowhere. If you look at the years 2019-2021, there is an additional $14.8 bln (goes to 29% of Shel). That means that those buy backs are increasing rapidly. Apart from the last week and a few days ( nice rise), the share price is pretty much exactly where it was 6 years ago. So, the investment is worth nothing. Of course there was the world wide upset 2019-2021, so it is hard to cypher that effect. But we're now only back to pre-world wide upset.

For that much they could have bought ~16% of XOM and get ~$2 Billion/year in their dividends plus their stock price actually goes up so it would be worth >$84 Billion now.

Frankly, there are a lot of really good companies they could have purchased with ~$60 Billion. They could have bought both Devon and Oxy or Devon and Diamondback... The point is that almost any investment other than Shel or rdsa/rdsb would be worth more now and deliver massive dividends. Even a total stock index fund would be an improvement.

PDF page 246 in https://www.shell.com/investors/results-and-reporting/annual-report/_jcr_content/root/main/section/promo/links/item0.stream/1742873115632/6c20b8111738b9a590ba145f0d1c4fa0e530dae0/shell-annual-report-2024.pdf

Looks like Shell is liquidating:

Income (29.9) - Tax (12.0) = 17.9 < dividends (8.7) + buybacks (13.9) = 22.6

On a relative basis, this is good news for investors given the alternative of Shell burning this cash flow in internal capex projects. From what I understand, the financial markets are encouraging even well-managed oil & gas companies to prioritize distributions.

Sounds like a typical Brit response to your well pointed logic.

my senior manager showed up on his 6th intentional first class trip of the year that could have been an email to assure us that we all need to do more cut costs

no more catering for group meets or gcc charges

when asked about buybacks he said that buybacks mean the company has faith that the stock will go up and that’s a good thing. when i pointed out that excessively huge buybacks reflects a zombie company trying to put a bottom on the price, he said that’s crazy talk.

hmm ok. a lot of lesson are in this story about the company these days.