Uber Stock Rises on Accelerated $1.5 Billion Buyback Plan
Key Takeaways
Uber ( UBER ) shares jumped Monday after the ridesharing company said it is starting an accelerated stock buyback program with an agreement to buy back $1.5 billion in shares from Bank of America ( BAC ).
The company said the $1.5 billion purchase—expected to deliver more than 18.5 million shares—represents about 80% of the shares Uber plans to buy back under the accelerated plan, with the rest of the purchases expected to be completed in the first quarter of this year.
The accelerated plan is part of the $7 billion stock buyback program that Uber announced in Feb. 2024 , the first buyback program in the company's history.
CFO Says Uber Stock is 'Undervalued'
Uber CFO Prashanth Mahendra-Rajah said Uber is beginning 2025 with "considerable momentum" and plans to "continue scaling our free cash flows significantly," allowing it to invest in growing the company while also returning capital to shareholders.
“Our stock is undervalued relative to the strength of our business, and we plan to accelerate our buybacks under the existing authorization as a result," Mahendra-Rajah said. "This [accelerated share repurchase] represents a value-enhancing deployment of capital, retiring over one percent of our market cap.”
In its latest earnings report at the end of October, Uber said it had spent $697 million buying back its own stock in the first three quarters of fiscal 2024.
Uber shares were up more than 2.75% Monday morning.