Why Exelixis Stock Trounced the Market on Thursday

Cancer drug specialist Exelixis (NASDAQ: EXEL) was quite the stock market star on Friday. Following news that it's making a big, shareholder-pleasing move, market players piled into the company to push its shares 5% higher on the day. This provided some light in what was generally a gloomy trading session, with the S&P 500 index falling by 1.7%.

A $500 million move

After market close on Thursday, Exelixis announced that it will launch a new share repurchase program, authorized for up to $500 million worth of its common stock before this coming Dec. 31. This will kick in once the current buyback program, also capped at $500 million, is exhausted. The company anticipates that will occur in this year's second calendar quarter.

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As with most repurchase programs, this one will take place from time to time and involve various amounts.

The new initiative will be Exelixis's fourth; the previous one was launched in August 2024. The pharmaceutical company is hardly a slacker when it comes to snapping up its own stock; the company revealed that it expended more than $1.2 billion on the activity through the end of 2024.

This doesn't fully justify owning the stock, but...

Investors tend to welcome news of stock repurchases because they mean that a company is helping prop up the value of its equity by dipping into the market for it now and again. While a buyback program should never be the leading reason for buying any stock, it is an encouraging sign that a management team has that sort of commitment.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Exelixis. The Motley Fool has a disclosure policy.