Light & Wonder announces $1B buyback plan

Light & Wonder announces $1B buyback plan

Light & Wonder announces $1B buyback plan

After-hours trading on Thursday saw a little increase in Light & Wonder shares following the company’s announcement of a $1 billion share repurchase program.

The previously implemented $750 million repurchase attempt, which was set to expire in February of next year, has been replaced by the recently announced buyback plan.

According to a statement issued by the Las Vegas-based company:

“As of June 13, 2024, the Company has exhausted the full $750 million share repurchase authorization and purchased 11.2 million common shares, or 11.5% of shares outstanding at the inception of the program. The average purchase price of $66.72 per share represents a 28% discount to today’s closing price of $92.35.”

Light & Wonder’s shares have increased by 39.48% in the last year and by 12.47% so far this year. It’s unclear if those outcomes are attributable to the $750 million buyback attempt, but the gaming device maker was probably one of the best-performing gaming equities throughout those time periods as a result of those repurchases.

Businesses are free to repurchase some but not all of the disclosed dollar amount, and they are not legally required to carry out publicly announced buyback plans. In Light & Wonder’s case, the recently disclosed $1 billion repurchase program may be significant because the company used up all of the funds in the buyback plan, doing so nine months ahead of schedule, indicating a firm intention to purchase its own shares.

CFO Oliver Chow said in a statement:

“Our prior program was an effective value creation tool and moving forward the new program will allow us to deliver further value to our shareholders while underscoring our commitment to driving profitable growth and upside beyond 2025.”

Businesses repurchase shares on the open market at different periods. However, supposing Light & Wonder spends $1 billion on repurchases in a single day, based on the stock’s Thursday closing price of $92.35, the company could retire almost 10 million shares.

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