Shares in Amazon spiked briefly in after-hours trading, after the world‘s biggest e-commerce company announced plan to buy back $5bn (£3.4bn) of shares over the coming years. This replaces a $2bn buyback plan that was approved in 2010.
The online giant will buy back shares “opportunistically from time to time when it believes that doing so would enhance long-term shareholder value”, it said in a regulatory on Wednesday.
The scheme will be the Amazon‘s first stock repurchase programme in six years.
“Measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like day one,” said Jeff Bezos, Amazon CEO.
The new programme doesn‘t have an expiration date.
Retailers tend to announce share buybacks to tackle the dilution of investors that comes from the stock-based compensation of employees and directors, but buybacks aren‘t always viewed as a positive. Some shareholders believe that the company would be better suited to reinvest that money in their business.