Nokia Repurchases Own Shares: A Strategic Move to Offset Dilution and Return Cash to Shareholders

Nokia Corporation, a global leader in network technology, has announced the repurchase of its own shares on 17 February 2025. This strategic move is part of the company's ongoing share buyback program, which aims to offset the dilutive effect of new Nokia shares issued to the shareholders of Infinera Corporation and certain Infinera Corporation share-based incentives. The repurchases are based on the authorization granted to the Board of Directors by Nokia's Annual General Meeting on 3 April 2024.

The program targets the repurchase of 150 million shares, with a maximum 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 to offset the dilution from issuing additional shares, with the repurchased shares being cancelled accordingly. The repurchases are funded using the Company's funds in the reserve for invested unrestricted equity, which reduces the Company's total unrestricted equity.



The share buyback program is expected to have a positive impact on Nokia's earnings per share (EPS) and return on equity (ROE) in the short and long term. By reducing the number of outstanding shares, the program increases EPS for the remaining shareholders. Additionally, the repurchased shares are then cancelled, further reducing the number of outstanding shares and amplifying the EPS increase. This reduction in the number of outstanding shares also leads to a higher ROE, as the company's net income is now spread across a smaller equity base.

In the long term, the share buyback program can lead to increased shareholder value, a higher stock price, and a positive signal to the market. By returning cash to shareholders, the program allows shareholders to reinvest the cash in the company or use it for other purposes, leading to increased shareholder value in the long run. The share buyback program can also signal to the market that Nokia's management believes the company's shares are undervalued, which can lead to an increase in the stock price.

In summary, Nokia's share buyback program is a strategic move to offset the dilutive effect of the Infinera acquisition and return cash to shareholders. The program is expected to have a positive impact on Nokia's EPS and ROE in the short and long term, leading to increased shareholder value and a higher stock price.