STMicroelectronics Announces Status of Common Share Repurchase Program

Rhea-AI Summary

STMicroelectronics (STM) has announced the status of its common share repurchase program for the period from July 22 to July 26, 2024. The company repurchased 331,940 ordinary shares, representing 0.04% of its issued share capital, at a weighted average purchase price of €34.5040 per share. The total cost of the buyback was €11,453,255.84. The purpose of these transactions is to meet obligations arising from share option programs or other share allocations to employees or company bodies. Following these buybacks, STMicroelectronics now holds 9,099,607 treasury shares, approximately 1.0% of its issued share capital.

Positive

• Repurchased 331,940 shares, potentially increasing shareholder value
• Buyback program demonstrates confidence in company's financial position
• Shares can be used for employee stock options, aligning employee interests with shareholders

Negative

• Spent €11,453,255.84 on share repurchases, reducing available cash for other investments

Financial Analyst

STMicroelectronics' share repurchase program, while a routine corporate action, carries subtle yet significant implications for investors. The company's buyback of 331,940 shares (0.04% of issued share capital) at a weighted average price of €34.5040 per share, totaling €11,453,255.84, demonstrates a strategic allocation of capital.

This move serves dual purposes: firstly, it fulfills obligations related to employee stock options and share allocations, which can be seen as a positive for talent retention and alignment of employee interests with shareholders. Secondly, it provides flexibility for other lawful purposes under the Market Abuse Regulation, potentially including future capital structure optimization.

The repurchase price range of €30.8814 to €37.6392 over the period suggests the company views its shares as undervalued, a typically bullish signal. However, the relatively small volume (1.0% of issued share capital held in treasury post-buyback) indicates a measured approach rather than an aggressive stance on valuation.

Investors should note the potential impact on earnings per share (EPS) and return on equity (ROE), which may see a slight boost due to the reduced share count. However, the effect is likely to be minimal given the small scale of the buyback.

While share repurchases can be viewed positively, they also raise questions about the company's growth prospects and capital allocation strategy. Investors should consider whether STMicroelectronics could generate higher returns by reinvesting in R&D or pursuing strategic acquisitions in the dynamic semiconductor industry.

Corporate Governance Expert

STMicroelectronics' share repurchase program reveals several key aspects of its corporate governance practices. The program's approval by both shareholders and the supervisory board demonstrates a commitment to proper oversight and alignment with shareholder interests.

The company's adherence to Market Abuse Regulation guidelines, particularly Article 5(2), showcases strong regulatory compliance. This transparency extends to the detailed disclosure of daily transaction data, which goes beyond minimum requirements and fosters investor trust.

The primary stated purpose of meeting obligations for employee share programs is a positive governance signal. It indicates a focus on aligning employee incentives with company performance, which can enhance long-term value creation. However, the flexibility to use shares for "any other lawful purpose" warrants attention from governance-focused investors.

The repurchase's modest scale (0.04% of issued share capital) suggests a balanced approach to capital management, avoiding potential criticisms of excessive buybacks at the expense of strategic investments. This conservative stance aligns with responsible governance practices in the cyclical semiconductor industry.

Investors should monitor future uses of the repurchased shares and any changes in the company's capital allocation strategy. The current approach appears to strike a reasonable balance between shareholder returns and maintaining financial flexibility for future growth initiatives.

STMicroelectronics Announces Status of
Common Share Repurchase Program

Disclosure of Transactions in Own Shares – Period from Jul 22, 2024 to Jul 26, 2024

AMSTERDAM – July 29, 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 June 21, 2024. The Program was approved by a shareholder resolution dated May 22, 2024 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 Jul 22, 2024 to Jul 26, 2024 (the “Period”), of 331,940 ordinary shares (equal to 0.04% of its issued share capital) at the weighted average purchase price per share of EUR 34.5040 and for an overall price of EUR 11,453,255.84.

The purpose of these transactions under article 5(2) of Regulation (EU) 596/2014 (the Market Abuse Regulation) was to meet obligations arising from share option programmes, or other allocations of shares, to employees or to members of the administrative, management or supervisory bodies of the issuer or of an associate company.

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)
22-Jul-24	55,900	37.639	2,104,020.10	XPAR
23-Jul-24	50,140	37.1705	1,863,728.87	XPAR
24-Jul-24	62,900	37.1763	2,338,389.27	XPAR
25-Jul-24	74,000	32.4145	2,398,673.00	XPAR
26-Jul-24	89,000	30.8814	2,748,444.60	XPAR
Total for Period	331,940	34.5040	11,453,255.84

Following the share buybacks detailed above, the Company holds in total 9,099,607 treasury shares, which represents approximately 1.0% of the Company’s issued share capital.

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

• C3274C -- July 29 2024 -- Disclosure of transactions in Own Shares PR_FINAL FOR PUBLICATION

FAQ

How many shares did STMicroelectronics (STM) repurchase from July 22 to July 26, 2024?

STMicroelectronics repurchased 331,940 ordinary shares during this period.

What was the average purchase price per share for STM's buyback from July 22 to 26, 2024?

The weighted average purchase price was €34.5040 per share.

What is the total value of STM's share repurchases from July 22 to 26, 2024?

The total value of the share repurchases was €11,453,255.84.

What is the purpose of STMicroelectronics' (STM) share repurchase program?

The purpose is to meet obligations from share option programs or other share allocations to employees or company bodies.

How many treasury shares does STMicroelectronics (STM) hold after the recent buybacks?

After the recent buybacks, STMicroelectronics holds 9,099,607 treasury shares, about 1.0% of its issued share capital.