Alphabet, the parent company of Google, announced on Tuesday that its board has authorized $70 billion in share repurchases.
If Google spends the entire amount on buybacks, it would signify a continuation of its pace from the previous year. In April 2022, Alphabet announced $70 billion in share repurchases.
Since then, Google has been forced to reduce expenses and lay off workers due to “a different economic reality” and overhiring.
On Tuesday, Alphabet’s board authorized $70 billion in share repurchases.
Alphabet stated that it would consider both the stock price and market conditions when determining when to repurchase its 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 issue without voting rights. There are also Class B shares with supervoting rights that are not publicly traded.
In extended trading, Alphabet stock increased by more than 3 percent after the company reported revenue that exceeded Wall Street’s expectations.
Alphabet repurchased more of its own stock than any other company in 2022, with the exception of Apple.
In Washington, D.C., share repurchases have become a heated political topic. Investors like Warren Buffett favor share repurchases because they increase the value of existing shares by diminishing the number of outstanding shares. Buffett has referred to detractors of stock repurchases as “economically illiterate.”
Some politicians, including President Joe Biden, have criticized share repurchases, arguing that they are a poor use of company profits in comparison to alternatives such as pay raises and that the practice manipulates share prices. Supported by the Biden administration, a 1% tax on buybacks was enacted last year.