Nokia Boosts Shareholder Value with Strategic Buyback Program

Nokia Corporation, a leading global technology company, has announced a strategic share buyback program aimed at offsetting the dilutive effect of new Nokia shares issued to the shareholders of Infinera Corporation and certain Infinera Corporation share-based incentives. The program, authorized by Nokia's Annual General Meeting on 3 April 2024, targets to repurchase 150 million shares, with an aggregate purchase price not exceeding EUR 900 million. The repurchases started on 25 November 2024 and are expected to end by 31 December 2025.

The purpose of the repurchases is to reduce Nokia's capital and offset the dilution from issuing additional shares, with the repurchased shares being cancelled accordingly. This strategic move reflects Nokia's commitment to managing its capital structure and enhancing shareholder value, while maintaining its competitive edge in the technology industry.

As of January 2, 2025, Nokia has purchased shares worth approximately 3.75 million euros as part of this initiative, now holding over 222 million own shares. This buyback program is a part of Nokia's broader strategy to return up to EUR 600 million of cash to shareholders in tranches over a period of two years, as announced in January 2024. The program has been accelerated, with the post-increase repurchases starting on 22 July 2024 and completing on 21 November 2024.



The share buyback program has several potential market reactions. Firstly, it can lead to an increase in the share price due to reduced supply of shares in the market. As Nokia repurchases and cancels its own shares, the number of outstanding shares decreases, which can drive up the share price. Additionally, the repurchases can signal to the market that Nokia's management believes its shares are undervalued, which can lead to a positive sentiment among investors.

Moreover, with fewer shares outstanding, earnings per share can increase, making the company's earnings look more attractive to investors. This can lead to an increase in the share price and potentially attract more investors. If Nokia's share buybacks lead to an increase in earnings per share, the company may choose to distribute a larger portion of its profits as dividends to shareholders, which can attract income-seeking investors and further boost the share price.

Furthermore, a higher return on equity could make Nokia more attractive to investors, as it indicates that the company is generating a higher return on its shareholders' investments. This can potentially attract more investors and make Nokia's shares more attractive in the market.



In conclusion, Nokia's share buyback program is a strategic move aimed at offsetting the dilutive effect of new Nokia shares issued to the shareholders of Infinera Corporation and certain Infinera Corporation share-based incentives. The program targets to repurchase 150 million shares, with an aggregate purchase price not exceeding EUR 900 million. The repurchases started on 25 November 2024 and are expected to end by 31 December 2025. This program is a part of Nokia's broader strategy to manage its capital structure and enhance shareholder value, while maintaining its competitive edge in the technology industry. The share buyback program has several potential market reactions, including an increase in the share price, earnings per share, and return on equity, as well as a positive sentiment among investors.