A few months back, investor Carl Icahn urged Tim Cook to start buying back Apple shares. The logic behind a share repurchase is that it returns some of a company’s cash back to its owners. So, unlike a dividend, where a company writes a check to shareholders, the return of cash is indirect. Pat Regnier from Times.com gives some more details:
And now it seems that Apple has listened to Carl Icahn's hints, as the company has been the biggest buyback spender of 2014 among the S&P 500, spending more than $56 billion into the program, according to a fresh story by MarketWatch. Analyst Brian Colello said:
"It showed that management was confident in its upcoming product launches and helped to put a floor into the company’s valuation during times of skepticism”
Apple bought back $17 billion in shares last quarter, which represents a 240% year-over-year increase that marks the second-highest dollar amount spent on buybacks during a quarter by any individual company in the S&P 500 since 2005.