What is an Accelerated Share Repurchase (ASR) agreement?

An Accelerated Share Repurchase (ASR) agreement is a program where a company agrees to buy back a significant amount of its own stock directly from an investment bank, like Goldman Sachs in this case. The company usually pays a lump sum upfront and receives an initial block of shares, with the final number of shares repurchased determined later based on market prices.

Why is Nasdaq repurchasing its stock?

Nasdaq is repurchasing its stock as part of its capital allocation strategy to return value to shareholders. Share repurchases can reduce the number of outstanding shares, potentially increasing earnings per share (EPS) and signaling management's confidence in the company's stock value.

How many shares will Nasdaq ultimately repurchase?

The exact number of shares will be determined upon final settlement, which is expected in the first quarter of 2022. It will be based on the volume-weighted average price of Nasdaq's common stock during the ASR period, less a discount, and is subject to certain adjustments outlined in the agreement. An initial delivery of approximately 1.53 million shares is expected on January 27, 2022.

How does this ASR fit into Nasdaq's overall capital return plans?

This $325 million ASR is part of Nasdaq's larger $1.5 billion share repurchase authorization. It demonstrates an aggressive approach to deploying capital towards shareholder returns within the authorized framework.

NDAQ 8-K SEC Disclosure

Summary

Nasdaq, Inc. (NDAQ) announced on January 26, 2022, that it has entered into an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co. LLC to repurchase $325 million of its common stock. This action is part of the company's existing $1.5 billion share repurchase authorization, signaling a continued commitment to returning capital to shareholders and potentially boosting earnings per share. The ASR agreement involves an initial delivery of shares, with the final number of shares repurchased to be determined by the volume-weighted average price over a specified period, subject to a discount and potential adjustments. The transaction is expected to conclude in the first quarter of 2022. This move indicates Nasdaq's confidence in its stock and its strategy to enhance shareholder value through capital allocation.

Key Highlights

1Nasdaq entered into an Accelerated Share Repurchase (ASR) agreement for $325 million.
2The ASR agreement is with Goldman Sachs & Co. LLC.
3The repurchase is part of Nasdaq's existing $1.5 billion share repurchase authorization.
4An initial delivery of 1,533,923 shares is expected on January 27, 2022.
5The final number of shares repurchased will be based on the volume-weighted average price, less a discount.
6The ASR transaction is expected to be completed in the first quarter of 2022.
7The agreement includes provisions for potential adjustments to the number of shares and final settlement terms.

NASDAQ, INC. 8-K Report, Corporate Update (Jan 27, 2022)

Summary

Key Highlights

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