HomeFinancial MarketsRobinhood Stock Jumps After Approval of $1 Billion Stock Repurchase Program

Robinhood Stock Jumps After Approval of $1 Billion Stock Repurchase Program

Trading app Robinhood announced on Tuesday that it plans to repurchase as much as $1 billion of its shares as part of an upcoming stock repurchase program. As a result, the company’s shares jumped as much as 6% at one point during the after-hours trading.

According to the company, the repurchase program received the approval of the board of directors and will be focused on the outstanding Class A common stock. It will roll out in the third quarter of 2024 and is expected to take place over the course of two to three years. Robinhood didn’t specify whether the program has an expiry date.

Stock repurchasing takes place when the company uses excess cash to buy back its shares from the public market. Companies resort to this strategy when they want to create value for their shareholders but also in instances when they believe their stock is undervalued.

 Robinhood stock closed at $20.47 per share on Tuesday but went all the way up to $21.69 at one point in the after-hours trading. It later settled at around $21.43 per share. Prior to this movement, the company’s stock had been 65.48% up year-to-date but 62.76% down from its all-time high in August 2021.

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