STMicroelectronics Announces Status of Common Share Repurchase Program
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Insights
STMicroelectronics' recent share repurchase activity indicates a strategic capital allocation decision aimed at managing its capital structure efficiently. Repurchasing shares can be a signal of management's belief in the undervaluation of the company's stock and it is also a way to return value to shareholders. The transaction involved a modest 0.02% of the issued share capital, which may not have a significant impact on the stock price due to the relatively small volume compared to the total shares outstanding.
However, the repurchase at a weighted average price of EUR 42.6690 for a total consideration of EUR 6,663,231.52 could suggest confidence from the management in the company's future prospects. The buyback program's impact on the earnings per share (EPS) will be marginally positive, as the reduction in the number of shares outstanding typically leads to an increase in EPS, all else being equal. Investors should monitor whether the repurchased shares will be retired or held for future use, as this could influence the long-term capital structure of the company.
The semiconductor industry is characterized by high volatility and capital intensity. Share repurchase programs in this sector often reflect a company's lifecycle stage and its capital allocation priorities. STMicroelectronics' execution of its share repurchase program may be interpreted as a strategic move to optimize its capital allocation and potentially stabilize its share price.
It is important to consider the broader market trends and the competitive landscape. With the continuous demand for semiconductors in various sectors such as automotive, industrial and consumer electronics, companies like STMicroelectronics are under pressure to maintain market share and invest in R&D. The decision to use funds for share repurchases rather than exclusively for reinvestment in operations or strategic acquisitions may raise questions about the company's growth opportunities and capital expenditure plans.
The transactions have been conducted in compliance with the Market Abuse Regulation (EU 596/2014), which governs the conduct of share repurchases in the European Union. The purpose of the repurchase, as stated, is to meet obligations from debt financial instruments that are exchangeable into equity, which is a lawful use under the regulation. It's critical for investors to be aware of the legal framework governing such repurchases as they can have implications on the company's governance and regulatory compliance.
Moreover, the disclosure on the company's website provides transparency and allows stakeholders to scrutinize the individual trades. This level of transparency is important in maintaining investor trust and ensuring that the repurchases are not being used to artificially inflate the company's stock price.
STMicroelectronics Announces Status of
Common Share Repurchase Program
Disclosure of Transactions in Own Shares – Period from Jan 2, 2024 to Jan 5, 2024
AMSTERDAM – January 8, 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 Jan 2, 2024 to Jan 5, 2024 (the “Period”), of 156,161 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) |
| 1/2/2024 | 30,000 | 44.9863 | 1,349,589.00 | 30,000 |
| 1/3/2024 | 47,000 | 43.4344 | 2,041,416.80 | 47,000 |
| 1/4/2024 | 49,161 | 41.6225 | 2,046,203.72 | 49,161 |
| 1/5/2024 | 30,000 | 40.8674 | 1,226,022.00 | 30,000 |
| Total for Period | 156,161 | 42.6690 | 6,663,231.52 |
Following the share buybacks detailed above, the Company holds in total 8,667,000 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
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