AHN Staff
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Blackberry-maker Research in Motion will buy back $1.2 billion worth of its stocks in the next 12 months in a bid to boost the company's share prices. RIM's board approved on Thursday the share repurchase program, which would involve about 21 million common shares, based on current prices.
RIM, which has not bought back any shares the past year, said the price under the buyback program would be based on prevailing market price at the time of purchase. The program starts Nov. 9, 2009. RIM stocks repurchased under the program are subject to Rule 10b-18 of the U.S. Securities Exchange Act of 1934, which places limits on number of shares that may be bought in one day.
The board said in a statement, "RIM's Board of Directors believes that a share repurchase program at this time is in the best interests of RIM and its shareholders, and will not impact RIM's ability to execute its growth plans given the strength of RIM's balance sheet and expected cash flow generation over the next several quarters. Any shares purchase under the program will increase the proportionate interest of, and may be advantageous to, all remaining shareholders of RIM."
Since September, RIM shares have plummeted by over 30 percent and now are trading at almost record-low prices. Industry observers view this development as a likely consequence of the tighter competition in the smart phone market.
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