Apple passed on share buybacks while they were cheap


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Apple stock tumbled at the end of last year. Apple didn't buy low, though.
Photo: Ste Smith/Cult of Mac

During good times, Apple’s record-breaking share buyback has been credited with helping with a stock market boom.

Something weird happened in December, however. When Apple’s stock price was tumbling from its record high, Apple stopped buying back shares. Clearly the whole “buy low, sell high” thing doesn’t always apply!

As MarketWatch notes:

“In a filing with the Securities and Exchange Commission, the technology giant disclosed that it spent $8.24 billion repurchasing 38,024,000 shares during its fiscal first quarter ended Dec. 29, at what amounted to a weighted average price of $216.61.

That compares with the $19.44 billion Apple spent to buy back 92,463,000 shares, at a weighted average price of $210.32, during the sequential September quarter.”

In theory, you might expect that Apple would speed up its buybacks when the stock fell below $200, since this means it’s cheaper. However, from December 2 to December 29, a time during which AAPL fell 12 percent and closed at a 17-month low of $146.83, Apple repurchased zero shares.

Why did it make this call? Beats us. If you’re a financial whiz with plenty of stock market know-how, let us know in the comments below. It certainly seems a strange decision, though, particularly since AAPL has since rebounded.

On Thursday, Apple closed at $166.44. That’s still down considerably from its high of $232.07 back in early October, but it does suggest that things are once again headed in the right direction.

Will Apple’s share buybacks kick in again in 2019? We’ll have to wait and see. After all, if you listen to investors, AAPL is still a bargain stock.