Surely there were much better options for that money (e.g. paying down the debt, capital investment, or research and development) that could secure the future of the company?
Dave claims he is worried that cutting the dividend would lead to a drop in share price and a hostile takeover where the company could be systematically dismantled, sold off, and bled dry. Yet all he seems to be achieving is cutting out the middleman by destroying it himself.
Big D has over half million shares. He loves the dividend because he makes like $350k every time it is paid to shareholders.
Stock buybacks prioritize short-term gains over long-term investments. Instead of stimulating growth and innovation, buybacks attempt to inflate stock price and benefit shareholders, primarily executives, while neglecting crucial areas like research, development, and employee welfare.
The only good news is that if Heavy D still wants in on the looting action it means there's still a little meat on the bone left before Seagate is just a discarded carcass.
The stock buy backs go back to when Luczo took the company public after fleecing the original shareholders by going private and handing them Veritas stock at $200+/share.
The buy backs and dividends serve the same purpose for management as continually going private. Top management gives themselves generous equity shares and the company uses all cash flow to buy stock and issue dividends. No need to grow the company to increase the share value. Just buy back stock and increase the dividend.
It’s not a buyout but a continuous management buy under. Buy the company from right under the noses of the shareholder in the form executive incentives. The su---r is the long term holder of the stock.
Over the years Seagate has spent more on stock buybacks than the current market cap of the company. Where did the money go? Into the pockets of management and stock sellers - not share holders. The holders get screwed. They get to keep a hollowed out shell of a company with $6 billion in debt and a $300M settlement with the US government. Good luck.
"where the company could be systematically dismantled"
You mean like they are doing right now?
If the company is to survive it needs to be purchased by a bussiness minded group. Seagate is being sucked dry by expensive parasitic middle and upper management. People are promoted strictly for retention reasons only with no bussiness or people skill sets to speak of. We have VP’s at who have never given a single meeting with their entire staff and strictly suround themselves with yes men. Monkey see Monkey do! I have no hope that the group that got us into this mess can admit guilt and change course. If your young move on to something positive while the job market is still good.
I'll bet that virtually the entire 2017 tax cut was gifted to shareholders as well. Remember that was pitched as a way for companies to give back to their workers?