Apple has Bought Back More than $56B Worth of Shares from Stockholders in 2014

[RaduTyrsina]

A few months back, investor Carl Icahn urged Tim Cook to start buying back Apple shares. The logic behind a share repurchase is that it returns some of a company’s cash back to its owners. So, unlike a dividend, where a company writes a check to shareholders, the return of cash is indirect. Pat Regnier from Times.com gives some more details:

But by reducing the number of shares outstanding among which a company’s earnings and assets have to divided, a buybacks can make each share of a stock worth more. That’s assuming, of course, that investors think giving money back to shareholders is the wisest use of the company’s cash. A buyback can backfire if it leaves a company unable to invest in future growth.

And now it seems that Apple has listened to Carl Icahn's hints, as the company has been the biggest buyback spender of 2014 among the S&P 500, spending more than $56 billion into the program, according to a fresh story by MarketWatch. Analyst Brian Colello said:

"It showed that management was confident in its upcoming product launches and helped to put a floor into the company’s valuation during times of skepticism”

Apple bought back $17 billion in shares last quarter, which represents a 240% year-over-year increase that marks the second-highest dollar amount spent on buybacks during a quarter by any individual company in the S&P 500 since 2005.

Source: MarketWatch