The second quarter earnings season is in the books. Source: Wall Street Horizon Buy Back Now Before the Tax? Global Corporate Buyback Announcements by Quarter (Q3 Not Yet Complete) It’s important to recognize that these data are a count of events among companies around the world – it does not measure the dollar value of share repurchase authorizations or executions. This year, however, the count of buyback events has dropped off. Another flurry of activity happened during the year of speculation that was 2021. Buyback program initiations and modifications rose big in 2018 following a strong year for stocks in 2017 and the passage of the Tax Cuts and Jobs Act. Our data reveal that there was a relative dearth of share repurchase announcements during the middle of 2016 when global growth was sluggish and then again around the March 2020 Covid uncertainty. We tend to see more announcements of this corporate event type during the good times. Wall Street Horizon closely tracks buyback authorizations in two flavors: initial and modifications. Like so many pieces of legislation, this tax could spark unintended consequences such as a wave of corporate buyback authorizations and executions this year since the excise tax only applies to the market value of net corporate shares repurchased starting in 2023.¹ Trends In Stock Buyback Program Announcements “The buyback tax” aims to penalize companies for engaging in this type of shareholder accretive activity.

With its passage comes a new 1% excise tax on corporate net share repurchases. On August 16, President Biden signed the Inflation Reduction Act (IRA) into law.

Investors must carefully weigh risks and understand what they own ahead of 2023.

Wall Street Horizon’s corporate event data show a downtick in total buyback announcements this year after a 2021 surge.

The Inflation Reduction Act includes a controversial 1% excise tax on share repurchase programs that goes into effect next year.

Spotify stock buyback