Impact Of The House Proposal To Suspend Dividends/Buybacks

Yet again, big brother is sticking its nose where it ought not be. Telling corporations what they can or can't do with their money is criminal.
If this legislation gets passed, some entities will be helped and others will be hurt. This article explores a bit of both.
This proposal should be rejected, as it will be damaging in both principle and practice.
Federal Government over-reach is becoming all too commonplace these days. I am not here to muse about politics, but people in high places are taking unprecedented steps into the economy and into the finances of businesses that ought to be left alone in a free market. The Democrat led House of Representatives unveiled a proposed legislative plan to help the country bear up under the economic problems corona virus has led to. One aspect of that plan is to forbid dividend payments or share buybacks while the crisis continues. My intent with today's article is to dissect the impact that provision will have on several specific businesses, which will similarly affect others in like situations.
The Provision
Here it is:
Temporary Ban on Stock Buybacks and Dividends. This provision would impose a temporary ban on corporate stock repurchase activities and paying dividends until the impacts of the coronavirus on the American financial system have ended...
What? How can that be legal? How can the government come in and tell companies what they can or can't do with their money? I can't overemphasize how wrong this is, how it is a power grab of tremendous proportions.
Think of it. The Board of Directors approves share buybacks and dividend payments. The Board is intended to represent shareholders and be the intermediary between the owners and the managers. By implication, the shareholders, or rightful owners of the company, are the ones that approve those dividends. In other words, the democrats just proposed to come in and tell you what you can or can't do with the money generated by assets you own. On... Read more