Sun, 31 May 2020

Facebook plans to buy back $9 billion more of its stock

By Sheetal Sukhija, Minneapolis News.Net
10 Dec 2018, 02:41 GMT+10

CALIFORNIA, U.S. - As it attempts to emerge from the recent stock slump, the world's largest social media company, Facebook has announced plans to buyback more of its stock.

The social media giant earlier revealed in a regulatory filing that its board had authorized share repurchases of up to $15 billion. 

This buyback was part of Facebook's program that began in 2017.

However, now the company has said that it is planning to buyback $9 billion more of its shares.

Facebook clarified that the newly announced share repurchase is in addition to those prior authorizations. 

The announcement by the Mark Zuckerberg-led company comes as it attempts to boost confidence in the company.

Since the social media giant announced in July that it is expecting growth to slowdown in coming years, Facebook shares have plunged almost 40 percent. 

At the time, Facebook had also announced that it is expecting profit margins to narrow. 

Further, the company has suffered due to a string of scandals related to data privacy and misuse this year. 

The company's handling of misinformation during the 2016 U.S. Presidential election and its failure to act against Russia's attempts to influence the election, has also drawn close scrutiny and harsh criticism in recent months. 

Facebook has also drawn anger over its role in stoking ethnic and religious violence in several countries, especially Myanmar.

In addition, the company faced accusations of allowing advertisers target users according to repulsive categories like 'Jew Haters.'

It has also been blamed for selectively trading data with other companies to favor partners and punish rivals.

The list of controversies have brought the main social network to a saturation point, even as the company explores new business models. 

At the same time, it continues to lose top executive to rivals, complicating its growth and market standiing. 

On Friday, Facebook shares rose 1.4 percent in extending trading, but the stock closed at $137.42 in New York.

The company's shares are down by around 20 percent so far this year.

As of the third quarter, Facebook had about $41 billion of cash on tap.

The company is currently valued at around $390 billion.

Its additional share repurchase comes as Facebook makes a renewed push to prop up the company's stock price.

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