Monster Beverage Corp (MNST) shares are on the rise in after-hours trading on Monday after the company announced a new $500 million share buyback program.
The announcement came after the market closed, with Monster Beverage stating that its board of directors has authorized the repurchase of up to $500 million of the company’s outstanding common stock. This new program comes into effect as the company’s previously authorized buyback program had been fully utilized as of August 19th.
The share buyback program follows a recent period of stock decline for Monster Beverage. The company’s shares have dropped approximately 19% year-to-date, largely due to disappointing second-quarter earnings results. The company missed analyst estimates on both revenue and earnings per share as the energy drink category experienced slower growth in the United States. Despite the weaker performance, Monster Beverage did repurchase 2.2 million shares in the second quarter at an average price of $49.55 per share.
The announcement of the new buyback program has initially boosted MNST shares. Following the news, the stock climbed to around $47.50 before pulling back slightly. As of this writing, Monster shares are up 0.75% in after-hours trading, currently trading at $46.95.
This buyback program is a clear signal from Monster Beverage that they are confident in their long-term growth prospects despite the recent challenges. The company is hoping that the program will boost shareholder value and help to increase the stock price in the near future.
