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SAN FRANCISCO - Uber Technologies, Inc. (NYSE:UBER) has entered into an accelerated share repurchase (ASR) agreement with Bank of America, N.A. to repurchase $1.5 billion of its common stock.
This move is part of a larger $7.0 billion share repurchase authorization, underscoring the company's intent to optimize shareholder value and confidence in its financial performance.
Shares rose 5% on the news.
Prashanth Mahendra-Rajah, a representative of Uber, expressed that the company is poised to increase its free cash flows substantially, which will support its strategy to enhance shareholder returns while sustaining growth investments. He also noted Uber's view that its stock is currently undervalued in relation to the robustness of its business operations.
The ASR agreement stipulates that Uber will remit $1.5 billion to the dealer on January 6, 2025, and is slated to initially receive approximately 18.6 million shares, which is roughly 80% of the total expected shares to be repurchased. The final number of shares bought back will be determined by the volume-weighted average price of Uber's stock, factoring in a discount and adjustments in line with the ASR terms.
The completion of the transactions under the ASR agreement is anticipated to occur in the first quarter of 2025. This share repurchase plan reflects Uber's proactive approach to capital management, aiming to retire over one percent of its market capitalization.
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