Apple’s stock buybacks in Q1 totaled more than any other S&P 500 company by a wide margin. The iPhone maker poured $23.8 billion into purchasing its own shares, more than it has ever done before. And that’s saying a lot, as Apple been spending billions on buybacks for many years.
A billion here and billion there
Apple’s total is more than any company has ever spent on stock buybacks in a single quarter.
And the money spent in the first three months of 2019 is on top of the $74.2 billion this company invested in its own stock last year, and the $34.4 billion it spent in 2017. Apple’s total in the last 5 years is $234.7 billion, and $284.3 billion over 10 years, according to Axios.
For comparison, Oracle spent 10 billion on its stock in Q1, putting it in second place.
Apple stock buybacks explained
Companies buying their own shares off on the stock market and then retiring them is called stock buyback. The effect is to increase the value of the remaining shares.
Remember that each Apple share represents a tiny portion of the company. Reducing the number of these makes each remaining one worth a bit more because its then represents a slightly larger portion.
Stock buybacks are common but nevertheless controversial. The only significant beneficiaries of the billions spent are large investors. There has been a huge surge of buybacks from many companies in recent years paid for by the Republican tax cuts of 2017, which the Trump Administration said would allow companies to invest in new factories that would bring additional jobs to Americans.
In Apple’s defense, it’s invested the money from its tax cuts into more than just its own stock — Apple announced in 2018 plans to contribute $350 billion to the U.S. economy over a five year period.