Ford Motors stated that it’s planning to purchase back its 166M shares valued at $1.8B. The shares of the company went up by 1-percent to $15.62 yesterday. It has been reported that the value of the stock has not changed in 2014, when it was closed 10 cents at $15.
The firm is going to buy back the shares to decrease dilution from current stock grants to officials and to balance shares, which may be given to traders and investors. The whole amount will be concluded in 2014, as stated by Ford Motors.
Mich.-based firm last month granted 882k shares, worth $14M to Alan Mulally, Chief Executive Officer. Alan will very soon retire from his post this July. Being globe’s largest car manufacturer, it is finding many innovative ways to reward its shareholders and investors. The firm that restored its dividend last year is recompensing traders after granting stocks to its officials for looking after the firm. The Mich.-based maker earned $42.3B since 2008; the year from 2006-08 was literally hard for the organization, as it lost nearly $30.1B.
The company has plans to purchase as many shares, as it’s looking for bigger projects. The 116M share, worth $1.8B is what it is aiming for. Ford Motors said that the share buyback will balance the dilutive impact of possible exchange of currency due in 2016 and is also offering, share-based staff salary in this year.
It was the only one Detroit based car maker to not get involved in United States backed bankruptcy 5 years back. To be out of this bankruptcy issue, it borrowed nearly $23B in 2006 and controlled its major factors, such as blue oval logo and factories –as its security.
The company took this major step to offer stock-based rewards for workers and it said that this step is going to boost the shares in the auto market and it would also help it to increase its earnings/share.
This buyback program of as many shares to dilute conversions is due on November 15, 2016. After November 20, the company is going to cancel conversion rights of shareholders, who will get 30 days to convert their shares.
Alan Mulally, CEO will retire on July 1 and current COO Mark Fields would replace him. Mr. Alan started at Ford in 2006, and he eventually became the lead salesman with holders.