Earlier today Alphabet announced a set of third-quarter earnings for Google (also the first time Alphabet had reported Google earnings after the company change) which includes a hefty sum of revenue for the search company, now a subsidiary of Alphabet, totaling in the amount of $18.7 billion. This is certainly good news for Google and investors, but Alphabet CEO Larry Page didn’t stop there. Also part of the earnings call, they announced an official buy back of Google Class-C company stock would be taking place in the fourth quarter of this year which actually started at the beginning of this month, totaling an amount in excess of $5 billion. Aside from proving Alphabet’s success, the stock buyback also means good things for investors as it should help to increase the valuation of the stock they personally own.
The reason for this is that less stock will be available on the market, thus increasing its value, all the while the announcement of the buyback alone has already caused the share value to rise by a total of 11 percent. Although Alphabet hasn’t explicitly stated when the buyback would start exactly, they did mention fourth quarter which goes from October to December, so it’s likely the buyback will start sometime before the end of this month or in the beginning of next month. In addition, the buy back won’t happen all at once but instead over time through private transactions and/or open market purchases.
How much stock is bought back at each purchase point and how long the process takes depends on a couple of factors, as Alphabet mentions that market conditions and other investment opportunities could tie up their spending at certain junctures. It’s also possible that those things won’t affect the buyback at all as it’s merely a possibility. The total amount of the stock that Alphabet has planned to buy back from investors amounts to a sum of $5,099,019,513.59, or in short, just under $5B, $100M. Investors have been demanding the issue of a buyback on stock for quite some time and seems Google, or rather Alphabet was finally ready and able to deliver on that request to its shareholders.