[jessfyi]

Any part of "saving" Intel should include a mechanism barring them from putting any more money that should be spent on R&D towards stock buybacks ($152B since 1990 as of September.) That said quoting the former Intel CEO (who still owns 3,245,986 shares) as "[one of the] expert[s] who says breaking up Intel won't do any good" seems like journalist malpractice--and makes me all the more certain it should be subsumed by a company with executives hungry to actually win again.

[BeetleB]

Intel stopped buybacks a few years ago, and are now stopping dividends.

[insane_dreamer]

Most companies should be banned from doing this.

[toast0]

Buybacks are just dividends with better tax implications that somehow make people angry.

Companies historically are expected to pay dividends, at least when their business is doing well. Business at Intel was doing well for most of 1990-2017. There was some time after the Pentium 4 stopped scaling before the Pentium 4M offered a recovery, and the Itanium mess; but overall pretty good until 2017.

[YZF]

Buybacks aren't exactly like dividends because they directly affect the pricing of the stock by interfering with the supply and demand. That said I think people are mostly angry about the conflict of interest where CEOs that have current and future shares are making decisions by what will maximize their personal returns rather than what's best for the company and shareholders.

When a company with growth prospects does well it should invest those $$$'s into things like R&D and expansion. Companies that pay their profit as dividend are generally not expected to grow as much and their stock prices (P/E) tends to reflect that.

That said the taxation aspect is maybe a problem and should be addressed if it's not working as intended.

[matwood]

> Buybacks are just dividends with better tax implications that somehow make people angry.

Yeah, buybacks are the new boogieman. Let me decide when to take the tax hit on an investment and not be forced.

[disgruntledphd2]

Ok so I prefer dividends as I think that they encourage better behavior on the part of both investors and companies.

I think that buybacks definitely create a massive conflict of interest for C levels remunerated based on share price or EPS, and I dislike that I must sell to realize any gains. But perhaps this is a niche position .

[applied_heat]

What is wrong with giving the profit to shareholders? That is why the shareholders bought the shares.

[insane_dreamer]

It creates a massive conflict of interest for the company executives and favors short-term profits vs long-term sustainability of the company.

[gruez]

>that should be spent on R&D towards stock buybacks ($152B since 1990 as of September.)

Starting from 1990 seems like a weird starting point, because it includes much of Intel's heyday when their profits were arguably well deserved. Is the implication that every business shouldn't have profits and should plow every cent back to R&D?

[jessfyi]

I used that period (vs saying they spent $110B between 2005-2021) to establish the fact that it's a known, expected pattern of behavior regardless of Intel's performance, roadmap, or market conditions to lead the reader to recognize that if bailed out they'll likely continue in the near future instead of utilizing that money for its intended purpose.

Instead of assuming my comment is a generalized view on how businesses should operate as whole (and not the subject of the piece), perhaps take a moment to consider how the magnitude of buybacks--in the face of stiff competition, that have now leapfrogged them--is directly correlated to the mismanagement and dysfunction within Intel that leaves them unable to rise to the challenge the country demands.

[kyrra]

Most companies do stock buybacks as a way to pay out bonuses to employees and execs with a lower tax rate. Since RSUs are taxed lower (I think), companies pay employees with those. But those grants are given by creating new shares. To not dilute the value of these shares, the company needs to keep buying back shares.

[basiccalendar74]

RSUs are treated as cash income at vest and taxed at same rates.

Stock buybacks benefit general shareholders (i.e. beyond employees) since they push up stock value without causing a taxable event. The alternative is dividends which are immediately taxed.