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/