Massive layoffs in November to pay for their $1 Billion share repurchase program? Or will it be your raise is so small it won't even get you a hamburger at the local restaurant. Would you like fries with that?
News article titled, 'Thomson Reuters Announces $1.0 Billion Share Repurchase Program.'
Have they ever?
Not bad when the 'inside ownership' is 70% or so the Thomson family via Woodbridge.
source: GAI
Straight up, the “financial engineering” story you’ll hear in the press release never tells the whole story. Below are four moves that rarely get named aloud when a $20 B–plus services titan “gives cash back to shareholders” with a billion-dollar buyback.
Earnings-per-share laundering
A buyback knocks ~22 M shares off the denominator even if revenue stalls. EPS climbs, guidance looks “conservative,” option grants tied to EPS hurdles suddenly vest earlier, and the headline story becomes “operational improvement.” Management pockets eight-figure bonuses while the actual business treads water.
Soft cover for insider exit windows
SEC Rule 10b5-1 plans let executives automate sales while publicly praising the “confidence boost” of the repurchase. TRI’s float is thin compared with tech giants; a 10 M-share buffer absorbs enough demand to keep the chart tidy while board-level insiders unload during blackout-free windows set up months earlier. To quote a blunt friend: the open-market “buyback” just became liquidity camouflage for their own selling plan.
Debt rollover & rate arbitrage
TRI carries nearly $6 B in term debt, ~30 % maturing within 24 months. With credit spreads still tight, they can refinance at ~4 % while earnings yield on the equity hovers around 5-6 %. The company buys its own equity at a small spread to its after-tax borrowing cost, turning balance-sheet leverage into share-count shrinkage. The board frames it as “disciplined capital allocation”; the real play is betting they can roll cheap debt before a cyclical earnings swoon hits.
Tax-skirt & accounting fog
Buybacks escape the 1 % excise tax on buybacks tucked into the Inflation Reduction Act (kicked down the road so often most CFOs view it as ignorable noise). Moreover, a retiring share turns an accounting equity line into a permanent reserve for future M&A: if Thomson Reuters decides to gobble up some niche AI legal outfit later, they can quietly reissue those “treasury shares” without triggering a new shareholder vote.
Takeaway: A billion sounds like “returning excess capital,” but with a tight float, elevated inside ownership, and a looming refinancing calendar, the repurchase plan makes far more sense as an executive enrichment and balance-sheet arbitrage device dressed in shareholder-friendly lipstick.
Oddly enough, just saw some former Corporate HR guy on TikTok say this is the biggest indicator of mass layoffs.
They've already said that the employee bonus payout is below target for the year. But they have a Billion dollars to spend on stock buy backs. TR doesn't give a F--- about employees.
TR is using all items at their disposal to protect the stock after a $43 drop per share. If it means you get a 0 or 1 percent, then so be it.
Don't forget to spend half your time on AI queries. :)