Google parent company Alphabet just announced a monster $5 billion stock buyback

Alphabet, the new holding company that includes search giant Google, is starting off on a good foot with investors.

The company just announced that it will undertake a $US5 billion stock buyback starting in the fourth quarter.

Investors cheered the move, which was announced with its Q3 earnings on Thursday, sending shares up 11% in after-hours trading.

Stock buybacks lower the total number of shares on the market, helping to buoy a company’s stock price. The buyback is one of the first big moves by CFO Ruth Porat, a former Morgan Stanley executive who joined Google earlier this year.

Here’s what Alphabet said about the buyback:

The board of directors of Alphabet authorised the company to repurchase up to $US5,099,019,513.59 of its Company’s Class C capital stock, commencing in the fourth quarter of 2015. The repurchase is expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.

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