<story><title>Alphabet Announces Third Quarter 2016 Results</title><url>https://abc.xyz/investor/news/earnings/2016/Q3_alphabet_earnings/</url></story><parent_chain><item><author>ultimoo</author><text>Can someone shed light on why companies do a stock repurchase?</text></item><item><author>d4l3k</author><text>&lt;p&gt;&lt;pre&gt;&lt;code&gt;  Stock Repurchase

  In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7,019,340,976.83 of its Class C capital stock. The repurchase is expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.
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Is it typical for Google to have stock repurchases? I haven&amp;#x27;t heard of them doing that before.</text></item></parent_chain><comment><author>hencq</author><text>Basically a way to reward shareholders. They&amp;#x27;re more or less equivalent to dividend, but considered more tax efficient, because capital gains tax is lower than tax on dividends.</text></comment>
<story><title>Alphabet Announces Third Quarter 2016 Results</title><url>https://abc.xyz/investor/news/earnings/2016/Q3_alphabet_earnings/</url></story><parent_chain><item><author>ultimoo</author><text>Can someone shed light on why companies do a stock repurchase?</text></item><item><author>d4l3k</author><text>&lt;p&gt;&lt;pre&gt;&lt;code&gt;  Stock Repurchase

  In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7,019,340,976.83 of its Class C capital stock. The repurchase is expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.
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Is it typical for Google to have stock repurchases? I haven&amp;#x27;t heard of them doing that before.</text></item></parent_chain><comment><author>xyzzyz</author><text>It is a mean to return money to shareholders. The reason it is used over paying dividends is tax optimization. If you pay out the dividend, the shareholders need to pay income tax. If you do stock buyback, the shareholders need to pay capital gains tax, which is deferred until sale, and can even be offset by losses incurred on other capital holdings.</text></comment>