STMicroelectronics Announces Status of Common Share Repurchase Program
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Insights
The recent share repurchase program by STMicroelectronics reflects a strategic move often employed by corporations to manage capital allocation. By buying back shares, the company effectively reduces the number of shares outstanding, which can lead to an increase in earnings per share (EPS) and potentially enhance shareholder value. This move is particularly interesting given the average purchase price of EUR 40.5702, which indicates the company's assessment of the stock's value.
Investors often view share repurchases as a sign of confidence from management regarding the future prospects of the company. Moreover, the repurchased shares add flexibility for the company to address obligations from debt financial instruments exchangeable into equity, without diluting existing shareholders. The purchase of 0.02% of its issued share capital, while relatively small, is part of a broader capital management strategy that can affect investor perception and stock performance in both the short and long term.
STMicroelectronics' repurchase of shares worth EUR 6.7 million is a financial decision with implications for the company's balance sheet and capital structure. The cash outflow for the repurchase needs to be weighed against other potential uses of cash, such as investment in R&D or debt reduction. The repurchase indicates that STMicroelectronics prioritizes returning value to shareholders over other investments at this time.
It is also essential to consider the impact of such financial activities on the company’s leverage ratios and liquidity position. While share repurchases can signal a strong cash position, they can also reduce the cash available for unexpected opportunities or economic downturns. The decision to hold these shares in treasury suggests a calculated approach to future financial flexibility.
The share repurchase program by STMicroelectronics adheres to the regulatory framework outlined by the Market Abuse Regulation. The transparency and detailed disclosure of the transactions demonstrate the company's commitment to good corporate governance practices. It is also noteworthy that the repurchase was executed through a broker on a regulated market, ensuring fairness and compliance with market rules.
Shareholder approval and supervisory board consent for the program underscore the importance of stakeholder involvement in significant corporate decisions. The company's subsequent handling of the treasury shares, as per the Market Abuse Regulation, will be a key factor in maintaining investor trust and ensuring that the repurchase program aligns with the long-term strategic interests of the company and its shareholders.
STMicroelectronics Announces Status of
Common Share Repurchase Program
Disclosure of Transactions in Own Shares – Period from Mar 18, 2024 to Mar 20, 2024
AMSTERDAM – March 25, 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 Mar 18, 2024 to Mar 20, 2024 (the “Period”), of 165,237 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) |
| 18-Mar-24 | 54,702 | 41.3535 | 2,262,119.16 | XPAR |
| 19-Mar-24 | 55,646 | 40.4053 | 2,248,393.32 | XPAR |
| 20-Mar-24 | 54,889 | 39.9566 | 2,193,177.82 | XPAR |
| Total for Period | 165,237 | 40.5702 | 6,703,690.30 |
Following the share buybacks detailed above, the Company holds in total 10,436,737 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
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FAQ
What is the purpose of STMicroelectronics' common share repurchase program?
How many ordinary shares did STMicroelectronics repurchase during the specified period?
What was the weighted average purchase price per share for STMicroelectronics' repurchase transactions?
How many treasury shares does STMicroelectronics currently hold?
