Apple leads share buybacks in the US

This week, news shook the financial market. Tech giant Apple has released the largest share buyback value in the US. The company's board approved an additional amount of US$110 billion (R$561 billion), intended for share buybacks. This movement has been a trend in the world market. The creator of the iPhone breaks its own record for the largest share repurchase in the US. In 2018, the company authorized US$100 billion in buybacks, according to data compiled by market research firm Birinyi Associates.

Market trend

The financial maneuver of repurchasing shares has been a trend in the world market. According to a forecast by the investment bank Goldman Sachs, the leading companies in shares on the New York Stock Exchange will invest US$1.1 trillion (R$5.6 trillion) to buy back shares in 2025. This amount is approximately equivalent to the Product Gross Domestic Product (GDP) of the Netherlands. Apple is responsible for the six biggest share buyback announcements ever made in the US, in a list that includes Chevron and its rival Alphabet, owner of Google.

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_{Facade of the Apple store in Beijing, China (Photo: reproduction/Getty Images Embed/Bloomberg)}

Why buy back shares

Share buybacks happen so that companies can use their profits or capital reserves to acquire their own shares on the market. In this way, the company returns value to shareholders, attracting investors. These share repurchases are non-taxable to shareholders and provide long-term appreciation in market valuations. Another practice is the purchase of dividends, which directly fill investors' pockets and are more common in utility stocks, whose stable demand rewards investors with payments. Companies use this tactic to maintain their shareholder base and attract future buyers, as they allocate a smaller percentage of profits to shareholder rewards, as they reinvest a large portion of this value in projects and development.

Featured Photo: Diversity of colors in the Iphone15 models (Reproduction/Unsplash/Daniel Romero)