Latest news with #BirinyiAssociates
Yahoo
3 days ago
- Business
- Yahoo
Mark Cuban Calls For Billionaires' Tax On Soaring US Stock Buybacks As Georgetown Professor Warns About Path To Decline And Defeat
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. U.S. stock buybacks are on track to hit a record $1.1 trillion in 2025, sparking sharp debate among experts like Mark Cuban and Georgetown professor Rush Doshi over their economic impact and taxation. Record Stock Buybacks Fuel Corporate Wealth But Also Raise Concerns Doshi, assistant professor at Georgetown University and former Joe Biden NSC China advisor, highlighted the historic surge in U.S. stock buybacks, projecting $1.1 trillion in 2025 — a new all-time high, citing Birinyi Associates data going back to 1982. He contrasted this with China's investment-driven approach, warning, "This is the path to deindustrialization, decline, and defeat. American competitors in China don't do buybacks. They invest."Trending: The same firms that backed Uber, Venmo and eBay are investing in this pre-IPO company disrupting a $1.8T market — Stock buybacks, also known as share repurchases, occur when companies buy their own shares to reduce outstanding stock, boost earnings per share and often raise stock prices. While buybacks can reward shareholders with increased ownership stakes and potential returns, critics argue they divert cash from critical investments like research and development. The popular investor took to X, formerly Twitter, and said that increased buyback taxes would push companies to reinvest profits into growth or pay dividends — with qualified dividends often tax-free for many Americans. "Charging a higher buyback tax not only increases tax revenues, if the company does pay a dividend, married households making under $94k pay no taxes on it. If I own it. I pay full taxes," Cuban wrote. He noted this idea has been favored by some Democrats and argued it could generate more equitable revenue from the biggest public companies. In a follow-up post, Cuban said, 'I would make an exception if the repurchased shares were distributed equally to all employee[s] based on their cash earnings.' He stated that this method would democratize wealth inside companies, helping workers at all levels build financial security, not just top executives and shareholders.S&P 500 Buybacks Surge To Record $750B By June 2025 By June 5, S&P 500 firms had approved a staggering $750 billion in stock buybacks for the year, surpassing the roughly $600 billion seen by the same point in 2023 and 2024, according to aggregated figures from LPL Financial. The bulk of these authorizations came from three dominant sectors: communication services at $210 billion, financials at $200 billion and technology at $196 billion. While these numbers represent planned repurchases rather than completed ones, Turnquist noted that the market conditions for executing buybacks are "nearly wide open." Actual repurchase activity has also been robust. In the first quarter of 2025, S&P 500 companies bought back $283 billion worth of shares—up 23.6% from the previous quarter, 26.9% from a year earlier and a striking 38.4% higher than in 2023. Tech giants Apple Inc. (NASDAQ:AAPL), Meta Platforms Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Nvidia Corp. (NASDAQ:NVDA) collectively spent nearly $73 billion on buybacks until June 2025. Similarly, during that period, Major banks, including JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp. (NYSE:BAC), contributed another $18 billion combined. Read Next: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share. Arrived Home's Private Credit Fund's has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. This article Mark Cuban Calls For Billionaires' Tax On Soaring US Stock Buybacks As Georgetown Professor Warns About Path To Decline And Defeat originally appeared on
Business Insider
3 days ago
- Business
- Business Insider
Mark Cuban says companies should be taxed more for buying back their own shares
In an X post on Tuesday, the billionaire investor said raising the federal tax on the practice would push companies to reinvest in their businesses and hit wealthy shareholders — including himself — the hardest. The "Shark Tank" star called it "a way to charge the biggest public companies more" while shifting incentives toward long-term growth. Stock buybacks, also called share repurchases, happen when a company buys back its stock from investors, often reducing the number of shares in circulation. This can boost earnings per share and, in turn, the stock price, benefiting remaining shareholders. Critics say the practice can prioritize short-term gains over long-term investment. American companies bought back $166 billion in shares in July — the highest July total on record — bringing the year-to-date tally to $926 billion, surpassing the previous year-to-date record set in 2022 by $108 billion, per data from stock market research firm Birinyi Associates. The US has had a 1% tax on stock repurchases on publicly traded corporations since the Inflation Reduction Act, which took effect on January 1, 2023. Cuban said that a higher tax could encourage firms to use the cash to expand or pay dividends to shareholders, which he said would be tax-free for many Americans. "Married households making under 94k pay no taxes on it," Cuban wrote. "If I own it. I pay full taxes." In a follow-up X post, Cuban suggested exempting companies from the higher tax if they distributed repurchased shares to all employees, from interns to the CEO, based on each worker's share of total annual cash earnings. He said this would be a "baby step" toward reducing income inequality and boosting workers' net worth. A market correction could encourage more buybacks Citi predicted in a March note that there would be $1 trillion in buybacks for the year, up 11% from about $900 billion in 2024. The bank said market declines could spur more repurchases, as companies seize the chance to buy their shares at discounted levels. Citi said large firms like Apple, Alphabet, Nvidia, Wells Fargo, and Visa repurchased roughly $190 billion in stock last year alone. Citi's forecast came before a series of market warnings from Wall Street strategists. Analysts at BTIG, Evercore ISI, Stifel, Morgan Stanley, and Wells Fargo have all flagged the potential for a correction in the S&P 500 in the coming months. They cited stretched valuations, seasonal weakness in August and September, and uncertainty over tariffs' economic impact.
Business Insider
3 days ago
- Business
- Business Insider
Mark Cuban says companies should be taxed more for buying back their own shares
Mark Cuban wants to target a favorite weapon of American corporations: stock buybacks. In an X post on Tuesday, the billionaire investor said raising the federal tax on the practice would push companies to reinvest in their businesses and hit wealthy shareholders — including himself — the hardest. The "Shark Tank" star called it "a way to charge the biggest public companies more" while shifting incentives toward long-term growth. Stock buybacks, also called share repurchases, happen when a company buys back its stock from investors, often reducing the number of shares in circulation. This can boost earnings per share and, in turn, the stock price, benefiting remaining shareholders. Critics say the practice can prioritize short-term gains over long-term investment. American companies bought back $166 billion in shares in July — the highest July total on record — bringing the year-to-date tally to $926 billion, surpassing the previous year-to-date record set in 2022 by $108 billion, per data from stock market research firm Birinyi Associates. The US has had a 1% tax on stock repurchases on publicly traded corporations since the Inflation Reduction Act, which took effect on January 1, 2023. Cuban said that a higher tax could encourage firms to use the cash to expand or pay dividends to shareholders, which he said would be tax-free for many Americans. "Married households making under 94k pay no taxes on it," Cuban wrote. "If I own it. I pay full taxes." In a follow-up X post, Cuban suggested exempting companies from the higher tax if they distributed repurchased shares to all employees, from interns to the CEO, based on each worker's share of total annual cash earnings. He said this would be a "baby step" toward reducing income inequality and boosting workers' net worth. A market correction could encourage more buybacks Citi predicted in a March note that there would be $1 trillion in buybacks for the year, up 11% from about $900 billion in 2024. The bank said market declines could spur more repurchases, as companies seize the chance to buy their shares at discounted levels. Citi said large firms like Apple, Alphabet, Nvidia, Wells Fargo, and Visa repurchased roughly $190 billion in stock last year alone. Citi's forecast came before a series of market warnings from Wall Street strategists. Analysts at BTIG, Evercore ISI, Stifel, Morgan Stanley, and Wells Fargo have all flagged the potential for a correction in the S&P 500 in the coming months. They cited stretched valuations, seasonal weakness in August and September, and uncertainty over tariffs' economic impact. Some analysts say a pullback could prompt companies to buy back even more of their shares, as firms often use buybacks to support share prices when markets are under pressure.
Business Insider
5 days ago
- Business
- Business Insider
Apple and Google Drive Stock Buybacks to Record-Breaking Trillion Dollar Highs
U.S. tech titans and banks are on course to drive a record-breaking amount of share buybacks in 2025. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. According to new figures from Birinyi Associates, U.S. firms have announced $983.6 billion worth of stock buybacks so far this year. That is the best start to a year in over 40 years and is on course to hit more than $1.1 trillion worth of buybacks by the end of 2025. Best Ever That would mark an all-time high in the U.S. In May, Apple announced a $100 billion buyback, while in April Alphabet announced a $70 billion stock buyback program continuing a rising pattern since the Covid pandemic. JPMorgan said in July that the company will buy back $50 billion worth of stock. Bank of America announced a share-repurchase program of $40 billion, and Morgan Stanley reauthorized up to $20 billion in buybacks. U.S. companies announced $165.6 billion worth of buying last month, above the previous July record of $87.7 billion in 2006, according to Birinyi. Main Drivers It is being driven by strong earnings growth and tax cuts, which are bolstering corporate balance sheets. In addition, the uncertainty of President Trump's tariff trade strategies is freezing investment plans and making buybacks a more appealing use of incoming cash. It has also fueled the post-April resurgence in American stock markets such as the S&P 500 and Nasdaq Composite. This growth can be seen in the SPY ETF (SPY), which tracks the S&P 500 index, below. 'Things are better than everyone makes them seem,' said Jeffrey Yale Rubin, president of Birinyi Associates. 'Companies are flush with cash. They were in healthy shape even before the better earnings.' However, while buybacks can bring cheer to both businesses and investors as prices are boosted because there are fewer shares around to trade, it could spell bad news for the overall health of the U.S. economy. Some analysts believe that companies preferring buybacks over investing in factories or offering dividends could weigh on growth over the long-term.
Wall Street Journal
6 days ago
- Business
- Wall Street Journal
American Companies Are Buying Their Own Stocks at a Record Pace
American companies are repurchasing their shares at a record pace, boosting their balance sheets and fueling the U.S. stock rally. U.S. companies have announced $983.6 billion worth of stock buybacks so far this year, the best start to a year on record, according to Birinyi Associates data going back to 1982. They are projected to purchase more than $1.1 trillion worth overall in 2025, which would mark an all-time high.
