Uber Initiates $1.5 Billion Accelerated Share Buyback Program; Stocks on the Rise

SAN FRANCISCO - Uber Technologies, Inc. (NYSE:UBER) has entered into an Accelerated Share Repurchase (ASR) agreement with Bank of America, N.A. for a $1.5 billion common stock buyback. This move is part of a broader $7.0 billion stock repurchase authorization aimed at optimizing shareholder value and highlighting the company's confidence in its financial performance. Following the news, shares rose by 5%.

Uber's representative, Prashanth Mahendra-Rajah, stated that the company is poised to significantly increase its free cash flows, supporting a strategy to enhance shareholder returns while maintaining growth investments. He also noted that Uber believes its stock is currently undervalued compared to the robustness of its business operations.

The ASR agreement anticipates that Uber will pay the broker $1.5 billion on January 6, 2025, and will initially acquire approximately 18.6 million shares, which represents about 80% of the total shares expected to be repurchased. The final number of repurchased shares will be determined based on Uber's volume-weighted average share price, accounting for a discount and adjustments in accordance with the terms of the ASR.

Transactions under the ASR agreement are expected to be completed in the first quarter of 2025. This stock buyback plan reflects Uber's proactive capital management approach, aiming to repurchase more than 1% of the company's market capitalization.