Uber Shares Soar with Accelerated Stock Buyback Program
A Vote of Confidence in the Company’s Strength
Uber’s stock surged on Monday morning following the announcement of an accelerated stock buyback program, worth $1.5 billion. This move is part of the company’s larger $7 billion buyback program, unveiled in February 2024, marking a significant milestone in Uber’s history.
A Strategic Move to Unlock Value
The accelerated program will see Uber purchasing approximately 18.5 million shares from Bank of America, accounting for around 80% of the planned buyback. The remaining shares are expected to be acquired by the end of the first quarter of this year. According to Uber’s CFO, Prashanth Mahendra-Rajah, the company is starting 2025 with considerable momentum, driven by its ability to scale free cash flows significantly.
Returning Capital to Shareholders
Mahendra-Rajah emphasized that Uber’s stock is undervalued relative to the strength of its business, making this accelerated buyback a value-enhancing deployment of capital. By retiring over 1% of its market capitalization, Uber is demonstrating its commitment to investing in growth while also rewarding shareholders.
A Strong Track Record
In its latest earnings report, Uber revealed that it had spent $697 million buying back its own stock in the first three quarters of fiscal 2024. This accelerated program is a testament to the company’s confidence in its financial position and its ability to create long-term value for shareholders. As a result, Uber shares jumped over 2.75% on Monday morning, reflecting investor optimism in the company’s prospects.
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