FAST FIVE: 5 US Tech Giants Just Spent $116 Billion Of Repatriated Cash On Buybacks
And while equity-market performance in late September and October – when corporations entered a buyback “blackout” period – has largely vindicated their analysis, in case anyone still doubts the crucial role of the corporate bid, the Financial Times offered yet another piece of evidence in a story published in Tuesday's paper when it revealed the full magnitude of tech company buybacks fueled by the Trump tax cuts during the first three quarters of 2018.
Out of all the money repatriated by US companies thanks to the Trump tax cuts, US companies have spent a staggering sum on buybacks, and a comparatively paltry amount on boosting capex spending and reinvestment (the kind of corporate spending that helps drive economic growth).
The tech firms also spent some of the repatirated cash paying down debt, freeing up more money to spend on buybacks in the future.
Take Apple, for example: While the tech giant spent $14.5 billion on capex during the first three quarters of 2018 (after promising to reinvest some $350 billion in tax-cut enabled repatriated cash within the US), its buyback spending soared to $62.6 billion – nearly three times the prior-year period.
However, this spending will likely take longer to plan and execute.