Facebook clears $6b stock buyback

Facebook will buy back as much as $6 billion in stock from shareholders beginning in the first quarter of 2017, according to a document filed with the Securities and Exchange Commission Friday.

Usually a stock buyback program is a way to repay investors with cash currently sitting in the bank.

Facebook does not offer a dividend and never has, but it does have $26 billion in cash and marketable securities, according to its latest earnings filing.

Facebook might also feel its stock is undervalued and want to bring some of it back in-house. Either way, this is Facebook’s first stock buyback to date.

Facebook has historically grown at a very fast clip, the company is now in a position that it needs to find additional ways to create value for investors beyond just trying to expand its user base and gather more eyeballs to put ads in front of.

Facebook stock is up about 1.0 per cent in after-hours trading on Friday, according to a news agency report.