IBM in the 3rd quarter 2012 authorized another $5 billion in additional funds to be used for its share repurchase program, on top of the $6.7 billion remaining available for buybacks. That was $11.7 billion for its stock repurchase program in total, or about 5.3 percent of its outstanding shares. IBM requested additional share repurchase authorization at the April 2013 board meeting. Similarly, Lowe’s Companies is aggressively buying its own stock, called Treasury Stock on corporate balance sheets.

Many analysts say stock buybacks reflect optimism among companies and say it is a good sign. However, other analysts argue that buybacks eat cash that a firm could better utilize to grow. Intel in late 2012 borrowed $6 billion to buy back more of its own stock, even though that firm had the cash on its balance sheet to cover the transaction. Intel, like many large American firms, have most of their cash in overseas accounts, ie a large percentage of their revenues were derived in foreign countries. Many such firms prefer to leave their cash outside the USA, since to utilize those funds to pay dividends or purchase Treasury Stock, would trigger a big USA corporate income tax payment. The low interest rate environment in 2012/2013 prompted firms such as Intel to borrow money to buy back their own stock.

Increasing Treasury Stock is especially good to do whenever a firm believes its future is brighter than the industry average, and/or if the firm desires to protect itself from either hostile takeover, or to prevent potentially hostile outsiders from accumulating too much stock in the firm.