DIRECTV (Nasdaq: DTV) needs to stop pouring good, hard cash down a bottomless pit.

In the just-reported second quarter, the satellite TV operator spent $1.7 billion on share buybacks. That's a 4.9% boost to anything-per-share including earnings, share prices, and investor returns. Very nice.

But the company is doing this at a very inopportune time. DIRECTV's stock chart looks like the rickety first climb of a roller coaster, with a 46% return over the past year. That's a market-crushing return that leaves nearly everyone eating DIRECTV's dust. DISH Network (Nasdaq: DISH), Comcast (Nasdaq: CMCSA), and Time Warner Cable (NYSE: TWC) barely beat the S&P 500 index over that period, for example, while FiOS wrangler Verizon (NYSE: VZ) shows negative returns.

Would you prefer buying back shares when they're cheap and undervalued, or while they're climbing to heights unknown? What we have here is more than a temporary boost -- the stock is trading near all-time highs these days.

So yeah, buybacks make sense if management expects to keep outperforming and never looking back. In that case, it's a very wise move. The 50% year-over-year earnings growth to $0.60 per share on $5.9 billion in sales -- 12% above the year-ago quarter -- would seem to back that view up.

But beauty is only skin deep. I don't see DIRECTV keeping this growth up much longer. Despite higher earnings, DIRECTV reported 30% lower free cash flows in the quarter and glossed it over by pointing out that year-to-date flows are looking better than the 2009 tally.

In other news, DIRECTV is "a truly independent company" for the first time, because company godfather John Malone and his family traded in all of their vote-rich Class B shares for ordinary Class A stubs during the quarter. DIRECTV is now fully separated from former majority owner Liberty Media (Nasdaq: LINTA).

Add it all up, and there's something fishy going on here. DIRECTV is getting ready for a merger or buyout of some sort. It's the only reason I see for betting heavily on positive stock returns at this point, and a simplified ownership structure only underscores my point. Mergers can be messy when the participants are complicated.

So what's it gonna be, DIRECTV? Are you looking for a sweetheart deal with DISH to happen at long last? Would Verizon buy you to get a nationwide TV offering? Are there private equity titans waiting in the shadows?

Or ... perhaps you just like to burn your cash for no good reason?

What is DIRECTV up to? The comments box below is ready to hear your conspiracy theories.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.