Marvell Announces $3 Billion Stock Repurchase Authorization

Rhea-AI Summary

Marvell Technology, Inc. (MRVL) announces a $3 billion addition to its stock repurchase program, bringing the total repurchase authority to approximately $3.3 billion, the largest in the company's history. The existing program had $299 million remaining. Marvell can repurchase stock through open-market or negotiated transactions based on market conditions and corporate considerations.

Positive

• Marvell Technology authorizes a $3 billion increase in its stock repurchase program, demonstrating confidence in its financial position.
• The total repurchase authority now stands at approximately $3.3 billion, providing a significant boost to shareholder value.
• The company's management team will decide the extent and timing of stock repurchases based on market conditions and other corporate factors.
• Marvell's proactive approach to capital allocation through stock repurchases showcases a commitment to enhancing shareholder returns.

Negative

• None.

Insights

Financial Analyst

The announcement by Marvell Technology of a $3 billion addition to its stock repurchase program is a significant event that warrants a closer look from a financial perspective. Share repurchase programs are often viewed positively by the market as they can indicate that a company's management believes its shares are undervalued. In this case, the size of the authorization, being the largest in the company's history, could signal strong confidence from the management in the company's future prospects.

From a financial standpoint, repurchasing shares can be beneficial as it reduces the number of outstanding shares, potentially increasing earnings per share (EPS) and the intrinsic value of the remaining shares. However, it is essential to consider the opportunity cost of such a large capital allocation. The decision to repurchase shares rather than invest in growth or pay down debt may raise questions about the company's available high-return investment opportunities.

Moreover, the timing and extent of the repurchases are subject to market conditions, which adds an element of uncertainty. If executed properly, the buyback could provide support for the stock price in the short-term, but the long-term impact will largely depend on the company's ongoing performance and its ability to generate shareholder value.

Market Research Analyst

Marvell Technology's strategic move to increase its repurchase authority significantly can also be interpreted through the lens of market sentiment and competitive positioning. In the data infrastructure semiconductor sector, stock repurchases might convey a message to competitors and investors about the company's financial health and stability.

It's important to consider the broader industry context when evaluating this decision. If peers in the sector are not engaging in similar levels of capital return to shareholders, Marvell's action could set it apart and potentially attract more investors looking for companies demonstrating shareholder-friendly activities. On the other hand, if the industry is witnessing a trend towards large repurchases or dividends, Marvell's decision may be following an industry norm rather than setting a precedent.

Additionally, the repurchase program's impact on the company's market capitalization and liquidity should be monitored. A reduced share count could lead to higher stock volatility due to a lower number of shares available for trading. This could affect the stock's attractiveness to institutional investors who may prefer more liquid and less volatile stocks.

SANTA CLARA, Calif., March 7, 2024 /PRNewswire/ -- Marvell Technology, Inc. (NASDAQ: MRVL), a leader in data infrastructure semiconductor solutions, today announced that its Board of Directors has authorized a $3 billion addition to the balance of its existing stock repurchase program, increasing the total current repurchase authority to approximately $3.3 billion. This $3 billion increase is the largest repurchase authorization in our history.

Marvell's existing share repurchase program had approximately $299 million of repurchase authority remaining as of the fiscal year ended February 3, 2024. Under the program authorized by its Board of Directors, Marvell may repurchase stock in the open-market or through privately negotiated transactions. The extent to which Marvell repurchases its stock and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by Marvell's management team. The repurchase program may be suspended or discontinued at any time.

Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "seeks," "estimates," "can," "may," "will," "would" and similar expressions identify such forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties, including, but not limited to: the amount, timing and execution of Marvell's stock repurchase program; and other risks detailed in Marvell's SEC filings. For other factors that could cause Marvell's results to vary from expectations, please see the risk factors identified Marvell's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC from time to time. Marvell undertakes no obligation to revise or update publicly any forward-looking statements.

About Marvell

To deliver the data infrastructure technology that connects the world, we're building solutions on the most powerful foundation: our partnerships with our customers. Trusted by the world's leading technology companies for over 25 years, we move, store, process and secure the world's data with semiconductor solutions designed for our customers' current needs and future ambitions. Through a process of deep collaboration and transparency, we're ultimately changing the way tomorrow's enterprise, cloud, automotive, and carrier architectures transform—for the better.

Marvell and the Marvell logo are registered trademarks of Marvell and/or its affiliates.

For further information, contact:
Ashish Saran
Senior Vice President, Investor Relations
408-222-0777
ir@marvell.com

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SOURCE Marvell

FAQ

What did Marvell Technology announce regarding its stock repurchase program?

Marvell Technology announced a $3 billion addition to its stock repurchase program, increasing the total repurchase authority to approximately $3.3 billion.

How much repurchase authority was remaining in Marvell's existing program as of February 3, 2024?

Marvell's existing share repurchase program had approximately $299 million of repurchase authority remaining as of the fiscal year ended February 3, 2024.

How can Marvell repurchase its stock under the authorized program?

Marvell may repurchase stock in the open-market or through privately negotiated transactions under the program authorized by its Board of Directors.

What factors will determine the extent and timing of Marvell's stock repurchases?

The extent to which Marvell repurchases its stock and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by Marvell's management team.

Can Marvell's repurchase program be suspended or discontinued?

Yes, the repurchase program may be suspended or discontinued at any time.

What is the significance of Marvell's $3 billion increase in its stock repurchase program?

The $3 billion increase is the largest repurchase authorization in Marvell's history, showcasing confidence in the company's financial strength and commitment to enhancing shareholder value.