Expedia backpedals on ASR plans; $1 billion in shareholder value destroyed

Citing unacceptable terms in the current debt market, Expedia’s (NYSE: EXPE) chairman Barry Diller announced that the company is scaling back its stock repurchase program to a maximum of 25 million shares, down from the 116 million shares announced in June.

The market reacted unfavorably to the announcement, driving the share price down over 12% in 2 days.

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PAYOUT YIELD ANALYSIS

The new target of 25 million shares would return up to $750 million to shareholders.  With 303 million shares outstanding, the repurchase would return $2.48 per share.  Without a regular dividend in place, the Total Payout promises to be $2.48 per share.  At a share price of $26, the Total Payout Yield would be 9.5%.

- Payout Yield Staff

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