Facebook (NASDAQ:FB) has submitted a filing with the SEC that announces its plans to start buying back about $6 billion of its own Class A common stock starting in the first quarter of 2017. There is no specific timeline as to how the stock buyback will unfold, which leaves the company free to wait and buy back its stock at a lower price. Investors are generally not concerned about the future control of Facebook because there was a new class of stock issued early in 2016 that leaves Mark Zuckerburg in almost complete control of the company. Zuckerburg is said to be fixated on finding ways for Facebook to thrive in the long run and intends to keep steering the ship at the company for years to come.
With a current cash pile of about $26 billion in the bank, Facebook may be facing some pressure to make moves with its reserves, which is similar to the situation that Apple (NASDAQ:AAPL) is in. Facebook appears to be looking toward the future and hopes to focus on long-term decisions that will position the company for continued growth. Right now, Zuckerburg and other executives have come to terms with the fact that Facebook's user base and revenue from advertising dollars are probably maxed out. This latest maneuver to decrease the number of outstanding shares of Facebook stock should allow the company to take aggressive steps to invest.
When Facebook first announced earlier this year that shareholders should not expect the same kind of explosive growth that it had been able to produce in previous years, its shares dropped slightly. Facebook's ability to sell ad space, especially for mobile ads, was behind its stellar growth over the past four years. The reality is that there is not enough space left within each user's news feed in order for Facebook to increase its ad sales. In addition, Facebook executives have explained that they will like hit a plateau soon in terms of the prices they are able to charge for ad space.
Even with the understanding that Facebook simply cannot sustain its incredible growth rate for much longer, the news of the stock buyback plan for 2017 has resulted in a slight bump in shares. This bump has now stabilized. Jas Athwal, Facebook's chief accounting officer, announced on the same date that he will be stepping down from his executive position after working for the company for nine years.