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Quick Hits: Nike Runs to Repurchase Stock


Brief scrutiny of today's headlines.

Nike (NKE) plans to repurchase an additional $5 billion of its stock over 4 years, the athletic shoe and clothing maker announced Monday.

Nike says the new buyback plan will begin after the completion of its current 4-year, $3 billion plan, approved in June 2006. At the end of Nike's fiscal year on May 31st, the company had spent $2.1 billion on the current stock repurchase plan.

"Over the past 10 years, Nike has returned $5.5 billion to shareholders through the repurchase of more than 157 million shares," Nike CEO Mark Parker said in a prepared statement.

In general, companies repurchase their stock because the price is attractive, and the buyback can increase shareholder value. Fewer shares available to investors can increase demand for the stock and boost the price per share. In addition, a company may repurchase its shares because it's more attractive than other investments, such as expanding through acquisition.

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No positions in stocks mentioned.
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