STMicroelectronics Announces Status of Common Share Repurchase Program
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Insights
Share repurchase programs are a common strategy used by companies to return value to shareholders and signal confidence in the company's financial health and future prospects. In the case of STMicroelectronics, the repurchase of shares could suggest that the management believes the shares are undervalued or that it is an opportune time to reduce the share count, which can increase earnings per share (EPS) and potentially lead to a higher stock price.
The overall price paid for the shares, along with the weighted average purchase price, provides insight into the company's execution of the repurchase and its impact on the company’s cash reserves. The fact that the repurchased shares represent a small percentage of the issued share capital (0.01%) indicates a moderate approach to the buyback, unlikely to have a dramatic impact on the market perception of the stock but still reflective of a proactive capital allocation strategy.
STMicroelectronics' activity in the semiconductor industry, which is characterized by high volatility and rapid technological advancements, makes the timing and scale of share repurchases particularly noteworthy. A repurchase can be interpreted as a positive market signal, suggesting that the company is performing well amidst industry challenges such as supply chain disruptions, global chip shortages and competitive pressures. Investors often look at such buybacks as a proxy for future performance, which can influence the stock's desirability and liquidity.
By analyzing the market conditions during the period of the repurchase and the sector performance, one could assess the potential impact on the company's stock price and overall market sentiment. Additionally, the utilization of treasury shares to meet obligations from debt instruments exchangeable into equity is a strategic financial maneuver that can mitigate dilution effects for existing shareholders.
It's important to note the regulatory framework governing the share repurchase, specifically under article 5(2) of Regulation (EU) 596/2014 (the Market Abuse Regulation). This ensures that the transactions are conducted in a manner that is compliant with market abuse laws. The detailed disclosure of transactions is a transparency measure that provides shareholders and potential investors with critical information to make informed decisions.
The company's adherence to the regulations, including the Commission Delegated Regulation (EU) 2016/1052, is indicative of good corporate governance, which can have a positive effect on investor confidence. The stipulation that the shares may be used for any other lawful purpose, if not needed for the initial intent, highlights the flexibility in corporate strategy afforded to the company's management.
STMicroelectronics Announces Status of
Common Share Repurchase Program
Disclosure of Transactions in Own Shares – Period from Feb 20, 2024 to Feb 23, 2024
AMSTERDAM – February 26, 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 20, 2024 to Feb 23, 2024 (the “Period”), of 93,494 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) |
| 2/20/2024 | 45,000 | 40.9606 | 1,843,227.00 | XPAR |
| 2/21/2024 | 25,000 | 40.9741 | 1,024,352.50 | XPAR |
| 2/23/2024 | 23,494 | 41.7234 | 980,249.56 | XPAR |
| Total for Period | 93,494 | 41.1559 | 3,847,829.06 |
Following the share buybacks detailed above, the Company holds in total 9,770,898 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 period from Feb 20, 2024, to Feb 23, 2024?
What was the weighted average purchase price per share for the repurchased shares?
How much did STMicroelectronics spend on the repurchase of shares during the specified period?
What percentage of the company's issued share capital do the treasury shares represent after the buybacks?
