Uber Technologies, Inc. (NYSE: UBER) announced on Monday that it has entered into an accelerated share repurchase (ASR) agreement with Bank of America, N.A., to buy back $1.5 billion worth of shares. This move is part of Uber's larger $7 billion share repurchase plan previously disclosed. Prashanth Mahendra-Rajah, Uber's Chief Financial Officer, expressed confidence in the strategy, stating, "We believe our stock is presently undervalued when considering the robustness of our business, prompting us to expedite our buybacks under the current authorization. This ASR marks an efficient use of capital, effectively retiring over one percent of our market capitalization."
According to the agreement, Uber will make a $1.5 billion payment to the dealer on January 6 and anticipates an initial receipt of 18.578 million shares. The total number of shares repurchased under the ASR will be determined by the volume-weighted average price of Uber’s stock on specified trading days during the ASR term.
The completion of the transactions within the ASR agreement is projected for the first quarter. Uber’s stock experienced a 5.40 percent increase, reaching $68.08, in pre-market trading on the New York Stock Exchange.
