The e-commerce giant will buy back up to $5 billion worth of stock.
Amazon’s shares jumped nearly 2% on news that the company added a new board member and is embarking on a $5 billion stock buyback plan.
The e-commerce giant’s board authorized a repurchase of up to $5 billion of the company’s common stock, replacing a $2 billion buyback plan approved in 2010. Wednesday’s buyback plan doesn’t have an expiration date.
Investors like buybacks because it returns cash to shareholders and could help boost the value of their stock by reducing the number outstanding, according to Fortune’s Stephen Gandel. But buybacks aren’t always viewed as a positive because some investors believe that companies may be better off reinvesting that money in their business.
Although Amazon’s share price has dropped nearly 25% since December, investors seem bullish about the company’s buyback plans. Amazon’s stock rose 1.45% in after hours trading to $497.47 per share.
Additionally on Wednesday, Amazon said that Wendell P. Weeks, the CEO of Corning, the manufacturer of specialty glass and ceramics that are used in products like laptops, televisions, and laboratory products, would join its board, according to a filing with the SEC.