Ford Announces $1.8 Billion Buyback To Fight Dilution

After the close Wednesday, Ford F announced a $1.8 billion share repurchase program, totaling approximately 116 million shares.

Ford said it is buying back shares to fight dilution from the conversion possibility of senior notes due November 15, 2016 and stock compensation offered in 2014. According to the press release, dilution will be reduced by approximately three percent.

CFO Bob Shanks commented, “These actions are consistent with our overall capital strategy to take anti-dilutive actions and position ourselves to further reduce Automotive debt. The strength of our cash generation gives us confidence to take these actions to enhance shareholder returns. With these actions, we will reduce our diluted shares by about 3 percent.”

As expected, shares have reacted positively. After initially shooting to $15.70, shares are now trading at $15.60, up 0.91 percent.