STMicroelectronics Announces Status of Common Share Repurchase Program
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Insights
A company's share repurchase program often signals management's belief that its stock is undervalued. Analyzing STMicroelectronics' recent buyback, the repurchase of 147,502 shares at an average price of EUR 41.8154 represents a strategic use of cash reserves, which may indicate confidence in the company's financial health and future prospects. The buyback is a form of returning value to shareholders, as it can potentially increase earnings per share (EPS) by reducing the number of shares outstanding.
However, investors should also consider the opportunity cost of these buybacks. The capital used for share repurchases is not being invested in business growth or other strategic opportunities. It is crucial to analyze the company's balance sheet and cash flow statements to assess whether the buyback could affect its ability to invest in R&D or pay down debt, especially in the capital-intensive semiconductor industry.
STMicroelectronics operates in the highly competitive semiconductor sector, where innovation and technological advancement are key drivers of success. The repurchase program may affect market perception, potentially signaling to investors that the company is prioritizing shareholder returns over expansion. This could influence the stock's attractiveness to growth-oriented investors.
It is also important to consider the broader industry context when evaluating the impact of the buyback. If competitors are investing heavily in new technologies or market expansion, STMicroelectronics' decision to allocate funds for share repurchases could impact its competitive position over the long term.
The share repurchase by STMicroelectronics has been conducted in compliance with the Market Abuse Regulation (MAR), which aims to increase market integrity and investor protection. The disclosure of detailed transactions and adherence to regulatory requirements helps maintain transparency, which is crucial for investor trust.
Investors should note that the repurchased shares may be used to meet obligations arising from debt financial instruments exchangeable into equity, which could potentially dilute future earnings if exercised. The company's clear communication regarding the purpose of the buyback and the potential uses of the repurchased shares is essential for informed investment decisions.
STMicroelectronics Announces Status of
Common Share Repurchase Program
Disclosure of Transactions in Own Shares – Period from Feb 26, 2024 to Mar 01, 2024
AMSTERDAM – March 4, 2024 -- STMicroelectronics N.V. (the “Company” or “STMicroelectronics”), a global semiconductor leader serving customers across the spectrum of electronics applications, announces full details of its common share repurchase program (the “Program”) disclosed via a press release dated July 1, 2021. The Program was approved by a shareholder resolution dated May 27, 2021 and by the supervisory board.
STMicroelectronics N.V. (registered with the trade register under number 33194537) (LEI: 213800Z8NOHIKRI42W10) announces the repurchase (by a broker acting for the Company) on the regulated market of Euronext Paris, in the period between Feb 26, 2024 to Mar 01, 2024 (the “Period”), of 147,502 ordinary shares (equal to
The purpose of these transactions under article 5(2) of Regulation (EU) 596/2014 (the Market Abuse Regulation) was to meet obligations arising from debt financial instruments that are exchangeable into equity instruments.
The shares may be held in treasury prior to being used for such purpose and, to the extent that they are not ultimately needed for such purpose, they may be used for any other lawful purpose under article 5(2) of the Market Abuse Regulation.
Below is a summary of the repurchase transactions made in the course of the Period in relation to the ordinary shares of STMicroelectronics (ISIN: NL0000226223), in detailed form.
Transactions in Period
| Dates of transaction | Number of shares purchased | Weighted average purchase price per share (EUR) | Total amount paid (EUR) | Market on which the shares were bought (MIC code) |
| 26-Feb-24 | 40,000 | 41.3853 | 1,655,412.00 | XPAR |
| 27-Feb-24 | 25,896 | 42.0992 | 1,090,200.88 | XPAR |
| 28-Feb-24 | 45,000 | 41.9261 | 1,886,674.50 | XPAR |
| 29-Feb-24 | 25,000 | 41.6942 | 1,042,355.00 | XPAR |
| 1-Mar-24 | 11,606 | 42.4961 | 493,209.74 | XPAR |
| Total for Period | 147,502 | 41.8154 | 6,167,852.12 |
Following the share buybacks detailed above, the Company holds in total 9,916,661 treasury shares, which represents approximately
In accordance with Article 5(1)(b) of the Market Abuse Regulation and Article 2(3) of Commission Delegated Regulation (EU) 2016/1052, a full breakdown of the individual trades in the Program are disclosed on the ST website (https://investors.st.com/stock-and-bond-information/share-buyback).
About STMicroelectronics
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:
Céline Berthier
Group VP, Investor Relations
Tel: +41.22.929.58.12
celine.berthier@st.com
MEDIA RELATIONS:
Alexis Breton
Corporate External Communications
Tel: +33.6.59.16.79.08
alexis.breton@st.com
Attachment
FAQ
How many ordinary shares did STMicroelectronics repurchase in the specified period?
What was the weighted average purchase price per share during the repurchase period?
What was the total amount paid for the repurchased shares?
What is the purpose of the repurchase transactions according to STMicroelectronics?
How many treasury shares does STMicroelectronics currently hold?
