After the recent Amazon earnings, which were not bad at all, but which put a lid on the company’s growth expectations, there was just one thing missing: the same thing that capped Apple’s own growth, and creativity: a stock buyback. Well, we just got it.
From the just filed 8-K:
On February 10, 2016, the Board of Directors authorized the Company to repurchase up to $5 billion of the Company’s common stock. The program allows the Company to repurchase its shares opportunistically from time to time when it believes that doing so would enhance long-term shareholder value. The repurchase authorization does not have a fixed expiration. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. This stock repurchase authorization replaces the previous $2 billion stock repurchase authorization, approved by the Board of Directors in 2010.
And just like that AMZN joins the vaunted AAPL club in admitting it is fresh out of organic growth ideas, and will resort to balance sheet alchemy to boost its price higher over the foreseeable future, ostensibly first using cash and then debt, to raise the funds needed to buyback stock. Any immediate spikes in the stock will be faded fast and furious.
via Zero Hedge http://ift.tt/1KGaWgw Tyler Durden