Zuckerburg Authorizes $6 Billion Facebook Stock Buyback

November 25, 2016 - 2 minutes read

Big news is coming for social media giant Facebook in the first quarter of 2017, as founder Mark Zuckerberg has authorized a huge stock buyback. To the tune of $6 billion, the move is being reported as a reaction to Facebook’s slowed growth (to be fair, most people in the world use the platform at this point, so a change of strategy was inevitable at some point).

For iPhone app developers, the main interest in this story is the relationship between Facebook, Wall Street, and investors. Facebook has been re-distributing their stock for a year now, most recently through the issuing of special “non-voting” stocks that basically allow Zuckerberg to keep a tighter grip on the wheel while still allowing outside investment to flow in.

Keeping a firm control of company direction can be critical for San Francisco app developers and startups like Facebook, since being nimble and quick-moving is part of what has allowed the tech sector to outstrip brick-and-mortar businesses so quickly. Zuckerberg has placed a high value on long-term plays throughout the company’s history, from spurning ad revenue at the outset to separating their messaging from the primary Facebook iOS and Android apps.

Investors didn’t always look kindly on these moves, and that’s often how it plays out with publicly-traded tech companies — founder pivots, investors complain, pivot saves the company, investors forget they were wrong.

As for the recent buyback, Zuckerberg had this to say about it in their SEC filing:

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. The program will be executed consistent with the Company’s capital allocation strategy of prioritizing investment to grow the business over the long term.

The next question for app developers is: how will Facebook use the enormous amount of capital they’ve accumulated? Chances are we won’t be able to see what game Zuckerberg is playing until he pulls the checkmate. Chances are, investors won’t mind being kept in the dark a little longer.

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