Research in Motion announced today that it plans to buy back 2 million outstanding shares of its common stock to be canceled out. Maybe things are a bit better for RIM than what a lot of people think. Generally, when a company repurchases its own stock for cancellation, the goal is to drive the stock price up.
We can’t say for sure that this is the case, however, companies that reduce capacity, generally have an idea that there will be demand for their stock, thus, driving the price up.
Waterloo, ON – Research In Motion Limited (“RIM”) (NASDAQ: RIMM; TSX: RIM) announced today that it has agreed to purchase for cancellation 2.0 million of its outstanding common shares, representing approximately 0.36% of its common shares outstanding at April 5, 2010, pursuant to private agreements between RIM and a non-related third-party financial institution.
The purchases were made pursuant to an issuer bid exemption order issued by the Ontario Securities Commission. The common shares repurchased through the private agreements, together with the 3,935,800 million shares that RIM has repurchased through the facilities of the NASDAQ Stock Market since the beginning of April 2010, substantially complete the US$1.2 billion share repurchase program announced on November 5, 2009.