Facebook, Inc. (NASDAQ:FB) shares rose more than 3 percent on Monday after the company announced a $6 billion share repurchase program last Friday. The board of directors authorized to start repurchase Class A common stock in the first quarter of 2017, SEC filings showed on Friday. The company also said the buybacks will depend on factors including price and market conditions.
"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 company said in its filing.
The buyback plan comes after Facebook stock had been down more than 10 percent since it posted third-quarter earnings reported on Nov.2. The company warned that growth will slow ‘meaningfully’ in 2017. This is the first share buyback since the company went public four years ago. Facebook is the only top 10 U.S. technology companies didn’t buy back shares in the last few years. According to Bloomberg, U.S. technology companies spent $131 billion to repurchases shares last year.
Shares buyback program will reduce the total number of outstanding shares and make indicators like earnings per share look better. The company also plans to spend more on expanding its infrastructure and hiring engineers next year. Today, it announced to hire 500 more employees in its London headquarters.