Nokia Corporation: Repurchase of Own Shares

Nokia’s Share Repurchase Program

On 4 February 2025, Nokia Corporation announced that it has acquired its own shares on the stock exchange. The company purchased a total of 1,221,522 shares at a weighted average price of EUR 4.52 per share. This move is part of Nokia’s share buyback program, which was initiated by the Board of Directors on 22 November 2024.

Background of the Share Buyback Program

The share buyback program was launched to offset the dilutive effect of new Nokia shares that were issued to the shareholders of Infinera Corporation and certain Infinera Corporation share-based incentives. The repurchases are being carried out in compliance with the Market Abuse Regulation (MAR), the Commission Delegated Regulation, and under the authorization granted by Nokia’s Annual General Meeting in April 2024. The program began on 25 November 2024 and is set to end by 31 December 2025, with a target of repurchasing 150 million shares for a maximum aggregate purchase price of EUR 900 million.

Impact on Investors

For individual investors, Nokia’s share repurchase program can have both positive and negative implications. On the one hand, share buybacks can indicate that a company believes its stock is undervalued and can be a signal of confidence in future performance. This can potentially drive up the stock price in the short term and increase shareholder value. On the other hand, share buybacks can also be seen as a short-term financial engineering strategy that may not address underlying issues within the company.

Impact on the Global Market

From a broader perspective, Nokia’s share repurchase program can have implications for the global market. Share buybacks have become increasingly popular among publicly traded companies in recent years, with many using them as a way to return capital to shareholders and boost earnings per share. However, critics argue that share buybacks can come at the expense of long-term investments in research and development, employee wages, and other areas that can drive sustainable growth.

Conclusion

In conclusion, Nokia’s share repurchase program is a strategic move aimed at offsetting dilution and returning value to shareholders. While this move may have short-term benefits for investors, it is essential to consider the long-term implications of share buybacks on the company’s growth and sustainability. As Nokia continues to navigate the ever-changing landscape of the telecommunications industry, it will be interesting to see how the share repurchase program impacts its future performance and market position.