Summary
DexCom, Inc. announced on August 1, 2022, that it has entered into an accelerated share repurchase (ASR) agreement with JPMorgan Chase Bank, N.A. for up to $700.0 million of its common stock. The company has already made an initial payment of $700.0 million and received an initial delivery of approximately 3.0 million shares on August 3, 2022. This ASR is part of the company's previously authorized $700.0 million share repurchase program, which has a completion deadline of June 30, 2023.
Key Highlights
- 1DexCom has initiated a significant share repurchase program, signaling confidence in its valuation and commitment to returning capital to shareholders.
- 2An accelerated share repurchase (ASR) agreement for up to $700.0 million has been executed, with an initial $700.0 million payment made.
- 3Approximately 3.0 million shares were delivered to the company on August 3, 2022, as part of the initial ASR transaction.
- 4The final number of shares repurchased will be determined by the volume-weighted average price of the Company's common stock during the ASR term, subject to a discount.
- 5The ASR is expected to be fully settled within the third quarter of 2022.
- 6This repurchase activity is consistent with DexCom's previously announced $700.0 million share repurchase program, extending through June 30, 2023.
Frequently Asked Questions
An ASR is an agreement where a company buys back its own stock from an investment bank (in this case, JPMorgan Chase) through an accelerated process. The company typically pays a lump sum upfront, receives a portion of the shares immediately, and the final amount of shares repurchased is determined later based on market prices.
Share repurchases can signal management's belief that the company's stock is undervalued. It also increases earnings per share (EPS) by reducing the number of outstanding shares and returns capital to shareholders.
The accelerated share repurchase is for an aggregate notional amount of up to $700.0 million, and it is part of DexCom's previously announced $700.0 million share repurchase program.
The final settlement of the ASR is expected to occur during the third quarter of 2022. The overall share repurchase program has a period ending no later than June 30, 2023.