Light & Wonder to Repurchase up to $1 Billion in Shares

Light & Wonder, a global gaming powerhouse behind popular casino games and entertainment content, announced a move to repurchase up to $1 billion of its outstanding common stock. This new program, spanning three years until June 2027, signifies the company's belief in its future potential and commitment to rewarding shareholders.

The Light & Wonder logo on a black background. (Source: Light & Wonder)

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This announcement builds upon the success of the previous $750 million share repurchase program, which reached its full authorization before its February 2025 expiration. This complete utilization demonstrates strong investor interest and Light & Wonder's effective execution of the initial program.

Related: First Quarter 2024 Revenue at Light & Wonder Reaches New Milestone

The prior program saw significant share acquisition. Light & Wonder, which is currently responding to allegations of copyright infringement, repurchased a noteworthy 11.2 million common shares, representing roughly 11.5% of all shares outstanding when the program commenced. Notably, the average purchase price per share landed at $66.72, a compelling 28% discount compared to the closing price of $92.35 on June 13, 2024. This price disparity further underscores the potential value proposition for the company.

Share repurchases, often referred to as stock buybacks, are a strategic tool companies utilize to influence their stock price and enhance shareholder value. By repurchasing their own shares, companies effectively reduce the total number of shares available in the market. This, in theory, can lead to an increase in earnings per share (EPS), a key metric reflecting a company's profitability. Additionally, buybacks can signal management's confidence in the company's future prospects, potentially attracting more investors and driving up the stock price.

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Risking Future Success

Light & Wonder's decision to embark on this larger share repurchase program suggests the company's board believes its stock is currently undervalued and presents a compelling investment opportunity. By repurchasing shares at a discount, the company aims to potentially enhance shareholder value and create a return on investment for those who hold onto their stock.

However, there are some potential drawbacks associated with share repurchases. Critics often argue that these programs prioritize short-term gains over long-term investments in areas like research and development or business expansion. Additionally, buybacks can sometimes lead to increased debt levels for the company, potentially impacting its financial flexibility in the future.

The success of Light & Wonder's new share repurchase program will hinge on various factors. The company's overall financial performance, market conditions and investor sentiment will all play a role. Nevertheless, this program represents a significant step by the company to generate shareholder value and showcases its confidence in its ability to achieve sustainable growth in the years to come.

The company added that it will determine exactly how many shares to offer at a later date.


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