Alphabet, the parent company of Google, announced on Tuesday that its board of directors authorized the repurchase of $70 billion worth of shares.
If Google spends the entire amount on buybacks, it would be a continuation of its pace from the previous year. In April 2022, Alphabet announced a share repurchase program worth $70 billion.
Since then, Google has been forced to reduce expenses and lay off employees due to “a different economic reality” and excessive hiring.
Alphabet repurchased $70 billion in April 2022.
Alphabet stated that it would consider the stock price and market conditions when determining when to repurchase its own Class A and Class C shares.
Class A shares are the original Google shares issued with voting rights, whereas Class C shares are a more recent class without voting rights. There are also non-public Class B shares with supervoting rights.
After the company disclosed revenue that exceeded Wall Street’s expectations, Alphabet stock increased by more than 3 percent in extended trading.
Alphabet repurchased more of its own stock in 2022 than any other company except Apple.
Share repurchases have become a heated topic in Washington, D.C. politics. Investors like Warren Buffett are enamored of share repurchases because reducing the number of outstanding shares increases the value of existing shares. Buffett has referred to the detractors of share repurchases as “economically illiterate.”
Some politicians, including President Joe Biden, have criticized share repurchases, arguing that they are an inefficient use of company profits compared to alternatives such as pay raises, and that the practice manipulates share prices. The Biden administration supported the passage of a 1% tax on buybacks last year.