By Steve Holland and Alexandra Alper
WASHINGTON (Reuters) – U.S. President Donald Trump on Friday took Boeing Co
Corporations buy back their own shares as a way to invest in themselves. By reducing the number of outstanding shares, a company can boost its stock price, and it is one way corporations add value for shareholders.
Earlier this week, Trump said he did not like share buybacks, when asked by reporters if they would be permitted by a stimulus package being hashed out in Congress to help the American economy recover from the coronavirus.
The Republican president doubled down on his comments on Friday, when asked by a reporter during a news conference if the buybacks like those by Boeing and some airlines were a “deal breaker” for him.
“I never liked stock buybacks from their standpoint. When we did a big tax cut, and when they took the money and did buybacks, that’s not building a hangar, that’s not buying aircraft, that is not doing the kind of things that I want them to do,” he said.
Trump’s views on potential buyback restrictions matter because he would need to sign any stimulus package approved by Congress.
Boeing did not immediately respond to a request for comment.
The Tax Cuts and Jobs Act passed by Republican lawmakers in December 2017 – the biggest overhaul of the U.S. tax code in more than 30 years – slashed the corporate income tax rate and charged multinationals a onetime tax on profits held overseas.
The move prompted major U.S. corporations to bring home cash from abroad and ratchet up share buybacks. However, there was little evidence of companies reinvesting much of that money to expand, one of the goals of the overhaul.
Trump said on Friday that restrictions were not placed on companies at the time because “we thought they would have known better but they didn’t know better.”
“I am fine with restricting buybacks,” Trump added. “In fact, I would demand that there be no stock buybacks. I don’t want them taking hundreds of millions of dollars and buying back their stock because that does nothing,” he said.
(Reporting by Steve Holland and Alexandra Alper; editing by Jonathan Oatis)
