Aug 20, 2021 (Baystreet.ca via COMTEX) -- Spotify Technology SA /zigman2/quotes/207488629/composite SPOT +0.01% sprang up Friday after the company announced the board's approval to buy back shares up to $1 billion.
Spotify says it will begin the share repurchases from Q3 of 2021. Last month the Spotify's stock price fell after reporting weaker Average Revenue per Unit (ARPU) and monthly active users (MAU) during Q2.
Spotify held EUR3.1 billion in cash and equivalents at the end of Q2 and generated EUR54 million in operating cash flow.
The authorization to repurchase will expire on April 21, 2026. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The repurchase program will be executed consistent with the Company's capital allocation strategy, which will continue to prioritize aggressive investments to grow the business.
"This announcement demonstrates our confidence in Spotify's business and the growth opportunities we see over the long term," said CEO Paul Vogel.
"We believe this is an attractive use of capital, and based on the strength of our balance sheet, we continue to see ample opportunity to invest and grow our business."
Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, all in compliance with the rules of the United States Securities and Exchange Commission and other applicable legal requirements.
The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and the repurchase program may be suspended or discontinued at any time at the Company's discretion.
Spotify stock has lost 34.8% year-to-date. SPOT shares were up at the open by $8.84, or 4.3%. at $213.92 Friday.
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