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Finance

What’s Unique about Micron’s Stock Buyback Program?

Previously, we saw that Qualcomm (QCOM) and Broadcom (AVGO) undertook an accelerated buyback to compensate shareholders for their failed mergers. Whereas these buybacks were expected, Micron Technology’s (MU) was a surprise. Micron, a pure-play memory chipmaker, has one of the semiconductor industry’s most cyclical stocks. For a cyclical stock, profits and losses are compounded, destabilizing their cash flow. Therefore, cyclical companies do not have a capital return program in place.

However, Micron has achieved a cash flow windfall over the last two years, which the company has used to improve liquidity and reduce debt. At the end of first quarter of fiscal 2019, Micron had a net cash position of $3.1 billion, with $4.1 billion in debt and $7.2 billion in cash.

On the back of its strong balance sheet, the company announced a $10 billion stock buyback program in May. It undertook its first buyback, of $1.8 billion, in fiscal 2019’s first quarter (ended November 30).

View more information: https://marketrealist.com/2018/12/whats-unique-about-microns-stock-buyback-program/

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