STMicroelectronics Announces Status of Common Share Repurchase Program

Rhea-AI Summary

STMicroelectronics N.V. has announced the full details of its common share repurchase program, disclosing the transactions made in the period from January 15, 2024, to January 19, 2024. The company repurchased 154,144 ordinary shares, equal to 0.02% of its issued share capital, at a weighted average purchase price per share of EUR 39.6132, for an overall price of EUR 6,106,130.29. The purpose of these transactions was to meet obligations arising from debt financial instruments that are exchangeable into equity instruments.

Insights

Financial Analyst

STMicroelectronics' recent share repurchase activity indicates a strategic move to manage its capital structure and potentially signal confidence in the company's intrinsic value. The repurchase of 154,144 ordinary shares represents a modest reduction of the company's outstanding shares by 0.02%, which may have a marginal positive effect on earnings per share (EPS) by reducing the share count. With a total expenditure of EUR 6,106,130.29, the financial impact is relatively small given the company's market capitalization, yet it reflects a proactive approach to capital allocation.

Investors often view share buybacks as a positive sign, as they can indicate that management believes the shares are undervalued. However, it is essential to consider the opportunity cost of such a program. The funds used for repurchasing shares could alternatively be invested in growth opportunities or used to pay down debt. Given the company's assertion that the repurchases are to meet obligations from debt financial instruments exchangeable into equity, it appears that this action is also a strategic financial management decision rather than purely a signal of undervaluation.

Market Research Analyst

The semiconductor industry is known for its cyclical nature and capital-intensive operations. STMicroelectronics' decision to repurchase shares must be contextualized within the broader industry dynamics. The company's actions may be a response to industry-specific challenges such as fluctuating demand, global supply chain issues, or competitive pressures. Share repurchases can be a tool to stabilize the stock price during periods of volatility or to enhance shareholder value when organic growth prospects are limited.

It's also noteworthy that the repurchases were conducted on the regulated market of Euronext Paris, which ensures transparency and regulatory compliance. This suggests that STMicroelectronics is committed to maintaining investor confidence by adhering to market regulations. The disclosed transactions align with Article 5(2) of the Market Abuse Regulation, indicating a focus on legal and ethical standards in corporate governance.

Legal Expert

The transactions carried out by STMicroelectronics fall under the regulatory framework of the EU Market Abuse Regulation, which aims to increase market integrity and investor protection. The detailed disclosure of share repurchase transactions is a mandatory compliance measure that provides transparency and prevents market manipulation. The company's adherence to these regulations, including the detailed reporting on their website, demonstrates a commitment to regulatory compliance and corporate transparency.

Furthermore, the use of treasury shares to meet obligations arising from convertible debt instruments is a common practice that allows companies to manage dilution and provide liquidity for debt conversion. It's important to recognize that while this practice is lawful under Article 5(2) of the Market Abuse Regulation, it requires careful monitoring to ensure that it does not lead to any unfair advantage or misuse of insider information.

STMicroelectronics Announces Status of
Common Share Repurchase Program

Disclosure of Transactions in Own Shares – Period from Jan 15, 2024 to Jan 19, 2024

AMSTERDAM – January 22, 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 15, 2024 to Jan 19, 2024 (the “Period”), of 154,144 ordinary shares (equal to 0.02% of its issued share capital) at the weighted average purchase price per share of EUR 39.6132 and for an overall price of EUR 6,106,130.29.

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)
1/15/2024	30,000	39.7578	1,192,734.00	XPAR
1/16/2024	40,000	39.4734	1,578,936.00	XPAR
1/17/2024	53,503	39.0994	2,091,935.20	XPAR
1/18/2024	641	39.6226	25,398.09	XPAR
1/19/2024	30,000	40.5709	1,217,127.00	XPAR
Total for Period	154,144	39.6132	6,106,130.29

Following the share buybacks detailed above, the Company holds in total 9,016,785 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

• C3229C -- Jan 22 2024 -- Disclosure of transactions in Own Shares PR_FINAL FOR PUBLICATION

FAQ

What is the purpose of the repurchase transactions?

The purpose of the repurchase transactions was to meet obligations arising from debt financial instruments that are exchangeable into equity instruments.

How many shares were repurchased in the period?

A total of 154,144 ordinary shares were repurchased in the period.

What is the weighted average purchase price per share?

The weighted average purchase price per share was EUR 39.6132.

How many treasury shares does the company hold in total?

Following the share buybacks, the company holds in total 9,016,785 treasury shares, representing approximately 1.0% of the company’s issued share capital.