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· Posted on
February 21, 2024

ExxonMobil swims against the green tide but sees its bank balance swell with the huge spike in oil prices

With extremely high oil prices, Exxon has achieved a record profit for two straight quarters.

What's the key learning?

  • More and more energy companies have been focusing on building out their green credentials while ExxonMobil have continued building out their oil biz.
  • Exxon has achieved a record profit for two straight quarters and now it is keen to buy back its shares off the share market and this time it will repurchase $75 billion of stock.
  • A share buyback is a financial tactic to reduce the number of outstanding shares on the share market.

👉 Background: ExxonMobil is an American multinational oil and gas giant. Over the past few years, more and more energy companies have been focusing on building out their green credentials.

👉 What happened: ExxonMobil on the other hand have continued building out their oil biz. And with extremely high oil prices, Exxon has achieved a record profit for two straight quarters.

👉 What else: Now, Exxon is keen to buy back its shares off the share market and this time around, Exxon will repurchase $75 billion of stock.

What's the key learning?

💡A share buyback is a financial tactic to reduce the number of outstanding shares on the share market.

💡Think of a share buy back like a pizza party with 7 of your mates.

  • With a regular 8-slice pizza, you all get one slice.
  • But let’s say there were only 5 friends, so you can slice the pizza into 6 pieces.
  • While the size of the pizza is the same, each person now has a bigger chunk of the pizza.

💡The most common reason companies do a share buy back is to increase the value of those shares. So buying its own shares will limit the amount of shares available and boost the price of what’s left over.

‍

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