This year has been spent by 2018 mostly buying back its own stocks from the open market after a large tax windfall and the belief of the management that its shares were undervalued.
Apple spent almost $62.9 billion during the first nine months of 2018 buying back its shares. This record breaking and staggering sum is equal to the company’s revenue in the quarter which ended in September.
The Wall Street Journal report shows that it was not a good investment made by the company. As per the report, the shares were bought by Apple at a high price of $222.07. However, the company’s share price has decreased by 30% to $156.15 per share after being at its peak in October.
Apple invested around $63 billion buying back its shares which are now worth $53.8 billion at present. The company suffered a loss of $9.1 billion loss, as reported by The Wall Street Journal.
The company can probably afford the losses as the company is still minting money. After the tax reforms of last December, the company has decided to make heavy investment in buying back its shares. Apple maybe spending huge sums on buying back its shares as compared to other publicly traded company, but it is following the trend like other US companies that are spending a lot on buying back their shares.
It can be seen as a good sign for Apple as its primary investment declined quickly in terms of dollar. It bought about 6.7% of the outstanding shares in 2018, as per the report. In May, CEO Tim Cook said this move of buying back of shares by the company was a good move for the economy due to the taxes paid on the capital gains.
The company is planning to spend around $70 billion more on share repurchases.
Source: Business Insider, One News Page
