[klysm]

"When a measure becomes a target, it ceases to be a good measure." (Goodhart's law)

Does this apply here? It seems you could argue that profit is the one true number that _is_ a good measure, but it seems even that can be 'hacked' so that it isn't good anymore.

[TeMPOraL]

> It seems you could argue that profit is the one true number that _is_ a good measure

A measure of what? As a proxy for social utility, it's been thoroughly gamed and the two have little correlation.

Profit is currently used as a self-serving measure, because you can eat profit (after exchanging it for bread, or drugs, or yachts). In this sense it can't be hacked. Accounting around it can be and is, though.

[Majromax]

Money returned to shareholders is the "one true number," even moreso than profit. Retained earnings are only valuable insofar as investors expect them to be returned in the future -- a company that pays no dividends, buys back no shares, cannot be bought out, intends to operate until it goes insolvent, and cannot have a new board brought in to change these policies is "worthless" as an investment vehicle.

So in principle there's nothing wrong with the buybacks. However, investors can have the mistaken impression that these buybacks would continue into the future, and predictions of the future -- and thus the fair stock price -- can change in a heartbeat.

[SpicyLemonZest]

It's a good argument for why companies shouldn't monomaniacally focus on profit, but in practice they don't really seem to do that in the first place. (In fact, one of the prevailing concerns about the recent stock market has been that it focused too little on profit, with many large tech companies trading at extreme multiples of their earnings based on stories about how cool and important they are.)