What is the expected timing of the ASR settlement and how might it influence short‑term price movement?
Expected timing of the ASR settlement
Accelerated‑share‑repurchase (ASR) agreements are typically settled within 1‑3 business days after the transaction is executed (i.e., the “trade date”). In practice, Goldman Sachs will deliver the repurchased shares to Kemper on the settlement date (often T+2), at which point the cash outflow of $150 million is transferred to the dealer. Because the ASR is being executed under Kemper’s existing $550 million buy‑back authorization, the company does not need to raise additional capital; the cash for the transaction will be drawn from its balance‑sheet liquidity and will be reflected on the balance sheet once the settlement is complete.
Potential short‑term price impact
The ASR instantly reduces the publicly‑traded float (roughly 0.5‑1 % of KMPR’s outstanding shares) and signals strong management confidence. In the immediate 1‑2‑day window around settlement, the market often reacts positively: a modest price boost (1‑3 % on average) can occur as investors price in the lower supply and the “buy‑back” signal. However, the same settlement can also cause a brief uptick in selling volume as the dealer’s shares hit the market and the cash outflow may be perceived as a short‑term liquidity outflow. In practice, KMPR’s price has historically shown a modest “bounce” on the announcement day, followed by a short‑term consolidation.
Actionable insight
If you are already long or have a bullish view, consider adding on any pull‑back (e.g., a 1‑2 % dip) in the 2‑3 day window after the announcement, aiming for the 20‑day EMA or the recent swing‑low as a target entry. Keep a stop roughly 3‑4 % below your entry to protect against a possible short‑term sell‑off as the dealer’s shares settle. Conversely, a short‑term trader can look for a quick‑play breakout on higher-than‑average volume immediately after the announcement, targeting a 2‑3 % upside, but should exit within 3‑5 days to avoid any reverse‑engineered “buy‑back” fade. The key driver is the reduction in float and the confidence signal—both tend to support a short‑term price lift.