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Nike’s Board Approves $12B Buyback Program, 2-for-1 Stock Split, Shares Jump


Nike’s stock edged 4.3 percent higher in premarket trading on Friday after the athletic giant announced that its board of directors had approved a $12 billion buyback plan and a 2-for-1 split of its Class A and Class B common shares.

The new four-year program will commence once the current $8 billion authorization expires, which is expected to happen before the end of fiscal 2016, the Beaverton, Oregon-company said in a statement released Thursday afternoon.

“In a growing sports industry, Nike is the clear leader,” said Mark Parker, president and CEO. “We are built for growth, while also staying committed to creating shareholder value over the long term. We’ve proven it time and again, having returned over $23 billion to shareholders over the last 14 years through share repurchases and dividends. Moving forward, we see even greater potential for Nike as we continue to unlock new markets, new experiences and new products.”

The company also increased its quarterly cash dividend by 14 percent from $0.28 to $0.32.

Nike said the split will be in the form of a 100 percent stock dividend payable on Dec. 23 to “shareholders of record” at the close of business Dec. 9. Following this, the outstanding Class A and Class B shares will increase to around 353 million and 1.36 billion respectively, based on the outstanding shares as of Nov. 16. The common stock is expected to begin trading at the split-adjusted price on Dec. 24.

The announcement comes a month after Nike declared a bold plan to grow sales to $50 billion by the end of fiscal 2020. Total revenue for fiscal 2015 was more than $30 billion, a 10 percent increase over the previous year.