DocGo Announces Share Buyback Program
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Insights
The announcement of DocGo's new share repurchase program is a strategic financial maneuver that can have multiple implications for the company's market perception and capital structure. A buyback of this magnitude, representing about 10% of the company's outstanding shares, is a significant move that can lead to earnings per share (EPS) accretion. By reducing the number of shares outstanding, the company can potentially increase its EPS, which is a key metric for investors. This can make the stock more attractive to investors by signaling management's confidence in the company's intrinsic value, especially when the CEO mentions that the current share price does not reflect the company's value.
However, the funding of these repurchases through cash, cash equivalents, or debt will affect the company's balance sheet. If funded through debt, it could increase the company's leverage, potentially impacting its credit ratings and interest costs. On the other hand, using cash reserves could limit the company's ability to invest in growth opportunities or weather financial downturns. Investors should monitor the company's debt levels and cash position following the repurchase to assess the impact on financial health and future growth prospects.
From a market perspective, DocGo's decision to initiate a share buyback program could be interpreted as a positive signal to the market, suggesting that management believes the stock is undervalued. This can lead to a favorable market reaction, potentially boosting the share price in the short term. Historically, stock repurchase announcements have been associated with a positive stock price reaction, as they can be perceived as a sign of confidence from management in the company's prospects.
However, the actual impact on the stock price will depend on various market factors, including investor sentiment, overall market conditions and the execution of the buyback. If the repurchase is executed during a period of market volatility or investor skepticism, the intended positive effects may not materialize as expected. Market participants should also be aware of the potential for reduced liquidity in the stock, as a decrease in the number of shares available for trading can lead to higher volatility in the share price.
Legally, the share repurchase program must comply with SEC regulations, including Rule 10b5-1, which allows insiders of publicly traded corporations to set up a trading plan for selling stocks they own. The rule is designed to prevent insider trading by allowing these trades to be made at a time when the insider does not have any non-public information. DocGo's mention of potentially using Rule 10b5-1 trading plans suggests they are taking necessary precautions to ensure compliance with insider trading laws.
Additionally, the company's repurchase plan includes the possibility of executing transactions during an 'open window' and when the company does not possess material non-public information. This is in line with best practices to avoid any perception of market manipulation or unfair advantage. Investors and stakeholders should take note of the company's adherence to these regulations as it reflects on the management's commitment to ethical practices and legal compliance.
“We are proud of DocGo’s continued strong performance, and confident in our future potential,” said Lee Bienstock, CEO of DocGo. “We believe the recent decline in our share price is not reflective of the value of our Company or our stock, and that a stock repurchase is a value-enhancing deployment of capital. DocGo has consistently delivered on our commitments, is confident in our cash position and cash collections, and possesses strong business fundamentals.”
Under the terms of the repurchase program, DocGo may purchase shares of its common stock on a discretionary basis from time to time through open market repurchases or privately negotiated transactions or through other means, including by entering into Rule 10b5-1 trading plans or accelerated share repurchase programs, in each case, during an “open window” and when DocGo does not possess material non-public information.
“We look forward to initiating this buyback, and we expect to commence purchases depending on prevailing market conditions following the end of our current blackout period, which is set to expire in early March,” said Norm Rosenberg, CFO of DocGo. “We will be aggressive in continuing to monitor and evaluate all of our opportunities – including the company’s share buyback program – with a focus on providing long-term value to shareholders.”
The timing and actual number of shares repurchased under the repurchase program will depend on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations. The repurchase program may be modified, suspended, or discontinued at any time without prior notice.
Repurchases under this program may be funded from DocGo’s existing cash and cash equivalents, future cash flow or proceeds of borrowings or debt offerings.
About DocGo
DocGo is leading the proactive healthcare revolution with an innovative care delivery platform that includes mobile health services, remote patient monitoring and ambulance services. DocGo disrupts the traditional four-wall healthcare system by providing high quality, highly affordable care to patients where and when they need it. DocGo's proprietary technology and dedicated field staff of certified health professionals elevate the quality of patient care and drive business efficiencies for facilities, hospital networks, and health insurance providers. With Mobile Health, DocGo empowers the full promise and potential of telehealth by facilitating healthcare treatment, in tandem with a remote physician, in the comfort of a patient's home or workplace. Together with DocGo's integrated Ambulnz medical transport services, DocGo is bridging the gap between physical and virtual care. For more information, please visit www.docgo.com.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, the plans, strategies, outcomes, and prospects, both business and financial, of the Company, including its share repurchase program. These statements are based on the beliefs and assumptions of the Company’s management. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions, outcomes, results or expectations. Accordingly, you should not place undue reliance on such statements. All statements other than statements of historical fact are forward-looking, including, but not limited, to statements regarding the Company’s future actions, business strategies or models, plans, goals, preliminary revenue results for 2023, future events, future revenues, future margins, current and future revenue guidance, future growth or performance, financing needs, business trends, results of operations, objectives and intentions with respect to future operations, services and products, and new and existing contracts or partnerships. In some cases, these statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “might,” “will,” “should,” “could,” “can,” “would,” “design,” “potential,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or the negative of these terms or similar expressions.
Forward-looking statements are inherently subject to substantial risks, uncertainties and assumptions, many of which are beyond the Company’s control, and which may cause the Company’s actual results or outcomes, or the timing of results or outcomes, to differ materially from those contained in the Company’s forward-looking statements, including, but not limited to the following: the Company’s ability to successfully implement our business strategy, including delivering value to shareholders via buybacks; the Company’s reliance on and ability to maintain its contractual relationships with its healthcare provider partners and clients; the Company’s ability to compete effectively in a highly competitive industry; the Company’s ability to maintain existing contracts; the Company’s reliance on government contracts; the Company’s ability to effectively manage its growth; the Company’s financial performance and future prospects; the Company’s ability to deliver on its business strategies or models, plans and goals; the Company’s ability to expand geographically; the Company’s ability to deliver on its margin normalization initiative; the Company’s ability to maintain and roll out its backlog; the Company’s M&A activity; the Company’s ability to retain its workforce and management personnel and successfully manage leadership transitions; the Company’s ability to collect on customer receivables; the Company’s ability to maintain its cash position; expected impacts of macroeconomic factors, including inflationary pressures, general economic slowdown or a recession, rising interest rates, foreign exchange rate volatility, changes in monetary pressure, financial institution instability or the prospect of a shutdown of the
Moreover, the Company operates in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this press release are based on events or circumstances as of the date on which the statements are made. The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as and to the extent required by law. The Company may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements, and you should not place undue reliance on the Company’s forward-looking statements. The Company’s forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240131549986/en/
Media:
DocGo
Michael Padovano
5W Public Relations
docgo@5wpr.com
pr@docgo.com
DocGo Investors:
Mike Cole
DocGo
949-444-1341
mike.cole@docgo.com
ir@docgo.com
Steve Halper
LifeSci Advisors
646-876-6455
shalper@lifesciadvisors.com
ir@docgo.com
Source: DocGo Inc.
FAQ
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