Nokia Stock Plummets Nearly 6% on Monday

Nokia Stock Plummets Nearly 6% on Monday

Investors often get excited when their companies announce and/or launch share buyback programs. Indeed, if they are well thought out and managed effectively, they can add value to the stock in question.

Alas, it doesn’t seem to be the case NokiaIt is (NYSE:NOK) latest share buyback initiative. Upon news of its official launch, investors sold Nokia’s US-listed shares and closed on Monday with a price almost 6% lower. On the other hand, the S&P500 The index landed in positive territory, up 0.6%.

Start of a new share buyback program

Before the US markets opened, Nokia announced that it had started the first phase of its new share buyback cycle. These were announced alongside the company’s fourth quarter and full year results in late January.

At the time, the telecom‘s board authorized share buybacks of up to 600 million euros ($653 million) over a two-year period. It should be noted that the company only buys back shares listed in its home country of Finland; US-listed stocks will not be part of the initiative.

In the first of two phases of the program, Nokia will purchase up to 300 million shares ($327 million) of these Finnish stocks. The earliest date for this to begin is next Wednesday March 20 and the phase will end on December 18.

The glory days were a long time ago

Nokia said its main goal with the buybacks was to “optimize” its capital structure. It’s likely that many investors would rather the company focus its energies on growing its business, as it has fallen to the status of a niche player in its industry rather than the dominant hardware maker it once was.

Should you invest $1000 in Nokia Oyj right now?

Before buying Nokia Oyj shares, consider this:

THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Nokia Oyj was not one of them. The 10 stocks selected could produce monster returns in the years to come.

Equity Advisor provides investors with an easy-to-follow plan for success, including portfolio building advice, regular analyst updates, and two new stock picks each month. THE Equity Advisor The service has more than tripled the performance of the S&P 500 since 2002*.

See the 10 values

*Stock Advisor returns March 18, 2024

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.

Why Nokia stock plunged nearly 6% on Monday was originally published by The Motley Fool

Source Reference

Latest stories