Apple’s share buyback is the largest in U.S. history. Here’s what that means
Apple’s share buyback is the largest in U.S. history. Here’s what that means
The buyback announcement comes as iPhone sales have declined, although the tech giant still beat analysts’ earnings estimates this week.
(May 23, 2024), Apple revealed earnings for its fiscal second quarter. While iPhone sales were down almost 10%, the company’s revenues and earnings per share beat expectations, albeit slightly. On the company’s earnings call, in addition to execs talking up the prospects of Apple’s AI plans, the company also announced another share buyback—this one the largest in U.S. company history. Here’s what to know about it.
What is a share buyback?
A share buyback is when a company uses its money to buy shares of its own stock. This effectively removes those shares from the market, reducing the total number of outstanding shares in the company. Since there are fewer shares on the market, it should theoretically make the remaining shares more valuable.
What was the total value of the shares that Apple bought back?
The company said its board approved the repurchase of $110 billion in AAPL stock. According to Bloomberg, that makes this share buyback the largest in U.S. company history.
Have other tech giants done share buybacks before?
Yes. According to data compiled by market research firm Birinyi Associates (via Bloomberg), plenty of tech giants have completed buybacks before. Google owner Alphabet has bought back $70 billion worth of its shares each year for the past three years, for example.
Meta completed a $50 billion buyback in 2024 and a $40 billion buyback in 2023. And Microsoft’s most recent buyback was in 2021, worth $60 billion.
Is this the first time Apple has bought its shares back?
Hardly. The company has made numerous buybacks over the past decade. As a matter of fact, while its $110 billion buyback this week is a record-breaker, Apple is actually breaking its own previous record. Back in 2018, Apple initiated a share buyback for $100 billion—a record that held until now.
But between then and now, Apple also initiated five other share buybacks: $75 billion in 2019, $50 billion in 2020, $90 billion in 2021, $90 billion in 2022, and $90 billion in 2023.
How has AAPL stock reacted to the share buyback news?
Pretty well as of the time of this writing: AAPL stock is up 6.25% to $183.84 per share in premarket trading. That’s a stock price Apple shares haven’t seen since February.
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