Let's keep this going

Sign up today to receive our daily news briefs featuring a handful of the most important stories in business, tech, and life. Delivered weekdays and Sunday.

EMAILED ON June 26, 2019 BY Conor Grant

Apple spends a record $23.8B buying back its own shares — and saving cash in the process

Apple spent $23.8B buying back its own shares this past quarter, more than double the next biggest buy-backer in the S&P 500, Oracle (which spent $10B), Axios reports.

Even for Apple — which is responsible for 8 of the 10 largest stock buybacks in business history — this was a new record. 

So, why does Apple want to buy back its stocks so badly?

Buybacks are flexible and they reduce tax responsibilities

By buying back stocks, Apple reduces the number of shares on the market, increasing the value of its remaining shares.

It’s a cheaper way to pay shareholders than issuing dividends: Unlike regular dividends, Apple issues buybacks whenever it feels like it.

Plus, buybacks enable Apple to get rid of cash it would otherwise pay taxes on, boosting stock prices AND warding off the tax man. 

But buybacks are also controversial

Critics like Bernie Sanders argue that buybacks — which have increased dramatically in recent years and sucked up 54% of total earnings in the S&P 500 between 2003 and 2012 — elevate inequality by concentrating wealth with shareholders. 

Wall Street equity analysts, on the other hand, insist buybacks are just good business.

Get news (like this) delivered by email every morning

Easy there partner...

TO read this story, Enter your email below

let's save the world together

Hold that scroll...

Want the real story behind Amazon?

Bezos wasn’t always King. Find out how a shocking stat started his empire.

You're already reading this so you might as well let me finish my point.

Look, you came to this site because you saw something cool.

But here’s the deal. This site, also known as The Hustle, is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try. You can always unsubscribe.

Fresh business and tech news served daily.