We, in the Breakit editorial team, were really excited when the post was recorded just before Monday morning. 14:00: Spotify Spotify wants to redeem its shares for SEK 9 billion.
Typical buy-back programs are typically used by companies that generate high returns and indirectly distribute money to shareholders. But Spotify is a company that still needs the entire cash register to invest in growth. So, at first glance, it was noteworthy that the company would launch a billions of buy-back programs.
However, all of the Spotify press release suggests that the company's rebate program should be "in line with the company's capital allocation strategy, which prioritises investment in long-term business development."
Spotify will continue to invest in widespread growth, for example, to enter new markets. Instead, a buy-back program is created to buy stocks when using employee selection programs. It is not clear that Spotify will buy shares worth SEK 9 billion, which is grateful for the whole program.
The redemption date and the actual number of shares redeemed will depend on a variety of factors, such as prices, market conditions and alternative investment opportunities, the Spotify press release said.
Spotify will start the buy-back program from the fourth quarter of 2018. AGM has allowed up to 10 million shares to be sacked, and the board has approved a repurchase up to a maximum of US $ 1 billion, equivalent to SEK 9 billion.
The redemption program will expire on April 21, 2021.