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Dollar Tree Gains on Raising Buyback Size by $1.05 Billion By


© Reuters.

By Dhirendra Tripathi – Dollar Tree stock (NASDAQ:) jumped 13% on Wednesday after the company expanded its share buyback program.

Dollar Tree now has approval to buy back shares for $2.5billion.

The aggregate amount includes around $1.45 billion available for repurchases under the Board’s previous repurchase authorization approved on March 2, 2021.

Dollar Tree has purchased shares in excess of $950 millions during the current financial year, which runs from January to March.

As of Tuesday close, its equity base consisted of 224.911,000,000 shares. It had a market capital of $19.54 trillion. With the current price of $86.28 and the promise to buy back shares, it has the potential for a reduction in share count of around 13%.  

According to the company, it plans to buy back shares in private transactions or on the open market. The exercise has no expiration.

The stock count falls, so a buyback increases earnings per share. The buyback increases shareholder returns. A buyback of shares is usually done when the company doesn’t have any other uses for its cash or investors are looking to get their money back.


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