Facebook Likely Using Buyback to Support Further Share Price Recovery on the Back of Strong Earnings
Facebook (FB) shares surged after earnings as sales topped estimates. Facebook shares suffered a significant drop from a high of $193.09 on February 1st as the company has been embroiled in one controversy after another.
In conjunction with its strong earnings beat, Facebook announced a $9 billion share repurchase authorization. This follows a previous $6 billion authorization.
Facebook is in a strong position to boost the share price surge on the earnings beat with this buyback authorization. The company has significant domestic cash, about $7.5 billion in overseas cash and is generating significant cash flow, putting it in a strong position to execute on the authorization.