The board of directors of American neobroker Robinhood Markets, Inc. (NASDAQ:HOOD) announced that it has approved a $1 billion share repurchase program, demonstrating management and the board’s confidence in Robinhood’s financial strength and future growth prospects.
Shares of Robinhood reacted quite positively to the news, with NASDAQ:HOOD trading up 5% in aftermarket trading on Tuesday. The current aftermarket price of $21.45 would set a new 52-week high for Robinhood stock.
Robinhood has a market cap of about $18 billion, so $1 billion is a pretty significant chunk of the company’s stock.
“As our business and cash flow continue to grow, we are excited to announce a $1 billion share repurchase program to return shareholder value,” said Jason Warnick, Robinhood’s Chief Financial Officer.
Robinhood’s management currently expects to execute this program over a period of two to three years, beginning in the third quarter of 2024, depending on general business and market conditions and alternative investment opportunities. Management also plans to vary the rate of capital growth depending on the share price.