A $6 billion stock buyback may not silence the masses who are angry about the explosion of fake news on Facebook that may or may not have affected the 2016 presidential election — but it may lift the spirits of Facebook’s shareholders.
According to an SEC document filed Friday afternoon, Facebook said that its board has authorized a $6 billion repurchase program. The stock buyback, if the company chooses to exercise it, would go into effect in the first quarter of 2017 and does not have an expiration date.
Facebook warned investors that “the timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.”
Facebook CEO Mark Zuckerberg during the keynote address at the F8 Facebook Developer Conference Tuesday, April 12, 2016. (AP Photo/Eric Risberg)
The size of the buyback is consistent with what other tech giants have bought back in recent years. Last year, Google announced a $5 billion buyback; in the second fiscal quarter of 2016, Apple repurchased $10.9 billion worth of shares.
According to a September report from Factset, the information technology sector was “the top spending group” in terms of dollar-value buybacks, having spent $30.3 billion on share repurchase programs.
Shares of Facebook, which closed Friday’s regular trading session down 0.65%, jumped 1.25% in after-hours trading on the news. The stock has faced an 11% slump during November trading; it’s one of many tech stocks that is suffering in the wake of Donald Trump’s surprise victory in the 2016 presidential election. Market experts theorize that uncertainty over Trump’s policies towards Silicon Valley its tech companies (in the past, he’s tweeted that he’s against net neutrality) that’s driving much of the losses.
What Trump’s policies may or may not do for Silicon Valley isn’t Facebook’s only post-election headache. The social media site has come under fire for the fake news articles that have run rampant on its site; according to one analysis, fake news generated more engagement (shares, reactions, comments) in the final three months of the general election than did articles from legitimate news sources. These fake stories had “information” that was positive towards Trump, leading many to say that Facebook fueled Trump’s victory.
A Thursday Washington Post interview with a fake-news writer intensified the furor against the site: in it, the writer admitted, “I think Trump is in the White House because of me.”
Mark Zuckerberg, Facebook’s founder and CEO, has denied that his site had a discernible impact on the election’s outcome. In an on-stage interview at a tech conference on November 10, Zuckerberg called the idea “pretty crazy,” and said that fake news is “very small amount” of total Facebook content.