Why Amazon May Fill Its Own Shopping Cart With Buybacks
Comment of the Day

February 02 2021

Commentary by Eoin Treacy

Why Amazon May Fill Its Own Shopping Cart With Buybacks

This note from Bloomberg may be of interest to subscribers. Here is a section: 

Amazon.com Inc.’s equity performance has far exceeded the S&P 500 Index over the past five years, yet buybacks may be the best use of capital in the near term as financial flexibility grows and excess cash builds, according to Bloomberg Intelligence’s Robert Schiffman. With consensus free cash of almost $42 billion in 2021 and $58 billion in 2022 -- the e-commerce giant’s share-repurchase authority has gone unused since 2016 -- cash could exceed $100 billion over the next two years. The company is scheduled to report fourth-quarter earnings after the close of trading Tuesday.

Eoin Treacy's view

Some of the largest tech companies like Alphabet and Amazon do not buy back many of their shares. That hasn’t impeded investor enthusiasm because they have been able to continue to deliver on growth and new product offerings.

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