Recode’s Kara Swisher reports that PC maker Asus plans to use $1 billion in the next year from its $1.2 trillion purchase of Dell and other PC makers to help cover its $6.5 trillion buybacks.
The move would likely be the biggest single purchase by a U.S. company this year and one of the largest in a generation, according to Bloomberg.
This buyback plan is also likely to involve the largest and most complex buyback scheme ever undertaken in the history of the Federal reserve.
Dell and Dell’s PC sales jumped to $2.5 billion and $2 billion in Q1, respectively, while HP’s PC revenue climbed by nearly half a billion.
“This is one of those buys where the Fed might want to look into this,” Swisher says.
Intel’s share price also rose more than 10 percent.
The buyback plans of some major companies are often more complex than others, but Intel’s is the largest, Swisher writes.
Swisher adds that a more traditional approach to buybacks is also possible.
In the past, the Fed would buy back the assets of banks to help the banks avoid default.
But it has also used that approach in the past to buy back assets of the public.
In the current situation, the Federal government would also buy some of those assets, and if those assets do not meet the minimum standards, the government could be forced to bail out the bank that owns them.
Swisher says the current buybacks scheme has also been criticised for not being transparent, and that Intel and others would have to sell their holdings before the Fed or other central banks buy them.
It’s possible that some companies could buy their own assets from the Federal Treasury, but Swisher suggests that’s unlikely, saying the Treasury would probably only buy up assets held by banks that are already part of the central bank’s purchase program.
“The Fed doesn’t like to sell assets that are held by central banks, and the Treasury does not like to buy assets that aren’t held by the Fed,” Swimmer writes.
“The Treasury may also want to sell a piece of hardware to another company that is part of that central bank.”
The U.K.-based company is also the world’s second-largest PC maker behind Intel, and it announced a $1 million donation to the Clinton Global Initiative.
Swimmer says that in the last 10 years, the Clinton Foundation has spent $20 billion to support the Clinton family’s philanthropy.