Alphabet authorizes $70 billion buyback
- Google parent Alphabet said on Tuesday that its board of directors authorized $70 billion in share repurchases.
- Alphabet announced $70 billion in share repurchases in April 2022.
- Shares rose more than 3% in extended trading after the company reported revenue that surpassed Wall Street expectations.
Google parent company Alphabet said on Tuesday that its board of directors authorized $70 billion in share repurchases.
If Google ends up spending the entire amount on buybacks, it would represent a continuation of last year's pace. Alphabet announced $70 billion in share repurchases in April 2022.
Since then, Google has had to cut costs and lay off employees, citing "a different economic reality" and overhiring.
Alphabet said it would take into account the stock price as well as the market conditions when deciding when to buy back its own shares of both Class A and Class C stock.
Class A shares are the originally issued Google shares that conveyed voting rights, while Class C shares are a newer class that has no voting rights. There are also super-voting Class B shares that are not publicly traded.
Alphabet stock rose more than 3% in extended trading after the company reported revenue that surpassed Wall Street expectations.
In 2022, Alphabet repurchased more of its own stock than any other company aside from Apple.
Share repurchases have become a hot political topic in Washington, D.C. Investors like Warren Buffett are fond of share repurchases because they effectively make existing shares more valuable by reducing the number outstanding. Buffett has called critics of share buybacks economically "illiterate."
But some politicians, including President Joe Biden, have taken aim at share repurchases, saying they are a bad use of company profits over alternatives like pay raises, and that the practice effectively manipulates share prices. A 1% tax on buybacks supported by the Biden administration was passed last year.