Alphabet, Google’s parent company, said on Tuesday that its board of directors has authorized $70 billion in share repurchases.
If Google spends the entire amount on stock buybacks, it will be on par with last year’s pace. In April 2022, Alphabet announced a $70 billion share repurchase program.
Google has had to slash expenditures and let off staff since then, claiming “a different economic reality” and overhiring as reasons.
After beating Wall Street sales projections, shares climbed over 3% in extended trade.
When deciding when to buy back its own shares of Class A and Class C stock, Alphabet said it will consider the stock price as well as market conditions.
Class A shares are the original Google shares with voting rights, whereas Class C shares are a newer class with no voting rights. There are also non-publicly traded super-voting Class B shares.
In extended trading, Alphabet stock surged more than 3% as the company reported revenue that above Wall Street projections.
Apart from Apple, Alphabet repurchased more of its own stock in 2022 than any other firm.
Share repurchases have emerged as a contentious political issue in Washington, D.C. Share repurchases are popular among investors such as Warren Buffett because they effectively increase the value of existing shares by reducing the number of outstanding. Buffett has labeled opponents of share buybacks as “economically illiterate.”
However, some politicians, notably President Joe Biden, have criticized share repurchases, claiming that they are a poor use of company earnings when compared to alternatives such as salary rises, and that the practice effectively manipulates share prices. Last year, the Biden administration advocated a 1% tax on buybacks.