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The Buyback Disaster: Would Avishai Do It All Again?
At 24:52 · chapter starts 24:15
Harry flags a growing concern among investors: SBC levels in tech have become so normalized that they're eating investor returns. Avishai doesn't dismiss this. He believes giving employees equity is fundamentally the right alignment mechanism — people who build a company should be invested in its outcome — and he'd extend the practice far beyond tech if he could, arguing it would produce better outcomes even in government. But the excess is real. His framework for companies with cash is: acquisitions (hard, mostly fail), buybacks (underused, effectively dividends), or hiring more engineers (which destroys EBITDA and makes markets hate you). The right answer is balance, not ideology.
Wix had $1.5B in cash, no major acquisition planned, and bought back stock when it looked cheap. Then the market crashed. Avishai calls the timing terrible but still believes buybacks are underutilized tools — effectively a dividend for shareholders.
Wix executed a $1.5B buyback but the stock crashed afterwards, making the timing disastrous.
SBC is the right mechanism to align employees with company outcomes — Avishai wishes fashion companies did it too. But it must be balanced with buybacks to prevent dilution. The current tech-industry normalization of Snapchat-level SBC is a real problem for investors.
Base44 has grown to around 400 employees since being acquired as a one-person company.
Wix employs approximately 3,500 people, with customer support being the single largest department.
