BlackBerry has announced plans to launch a share repurchase program and buy back 12 million shares.
Announced on Thursday, the news sent up the ailing smartphone maker’s share price nearly two percent before market close on Thursday.
The smartphone maker’s board has authorized the plan, which will include the repurchase and cancellation of up to 12 million common shares — which is approximately 2.6 percent of the outstanding public float.
In the past year, BlackBerry has not repurchased any of its outstanding securities.
If the new scheme is granted approval by shareholders, BlackBerry will snap up shares through the Nasdaq, Toronto Stock Exchange or other markets if required.
The buyback program is designed to offset a new employee share purchase plan — to be presented at the firm’s annual shareholder meeting in June — and increase the number of shares available under BlackBerry’s equity incentive plan.
If approved, the share repurchase program will remain in place for 12 months. However, if shareholders do not approve the repurchase of 12 million shares, BlackBerry will simply drop the scheme.
BlackBerry Executive Chairman and CEO John Chen commented:
“The purpose of this repurchase program will be to offset dilution that may result from our proposed employee share purchase plan and from proposed amendments to our equity incentive plan.
“We intend to take advantage of our strong cash position to purchase our shares when the market price does not reflect what we view to be the underlying value and future prospects of our business, without adversely affecting our strategic initiatives.”
According to Thompson Reuters data, the tech giant has a free float of 502.8 million shares.