Golden Matrix Group, Inc. Announces Authorization of Stock Repurchase Program
Golden Matrix Group Inc. (NASDAQ: GMGI) has announced a $5 million stock repurchase program authorized by its Board of Directors. The program is set to expire on July 15, 2025, unless extended or discontinued. CEO Anthony Brian Goodman highlighted potential benefits, including counteracting short interest, mitigating market overhang, and providing an attractive use of capital. Shares may be repurchased in the open market or through negotiated transactions, with repurchases made at management's discretion. The program will be funded using the Company's working capital and does not obligate GMGI to purchase any specific number of shares.
- Authorization of $5 million stock repurchase program
- Potential to counteract short interest in GMGI stock
- May help mitigate market overhang for GMGI common stock
- Possible accretion to earnings per share
- More tax-efficient way of returning capital to shareholders compared to cash dividends
- Repurchase program funded using company's working capital, potentially reducing available funds for other investments
- No guarantee on the exact number or value of shares to be repurchased
Insights
The announcement of a $5.0 million stock repurchase program by Golden Matrix Group Inc. (GMGI) can signal several key financial implications for retail investors. This move often indicates that the management believes the company's stock is undervalued, providing confidence in its current market position. By repurchasing shares, the company reduces the total number of shares outstanding, which can lead to an increase in earnings per share (EPS). Higher EPS can positively impact the stock price, as it suggests that each share now represents a larger portion of the company's earnings.
The program is expected to be conducted in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, ensuring that repurchases are made within legal boundaries and do not manipulate the stock price. Additionally, the inclusion of a Rule 10b5-1 plan could allow repurchases even during periods when insiders might otherwise be restricted from buying shares, such as during blackout periods.
However, the repurchase program’s flexibility in terms of suspension, termination, or modification means it doesn't commit the company to buy back a specific number of shares. The effectiveness of the program heavily depends on the company’s financial performance and market conditions.
For investors, this repurchase program, funded using the company’s working capital, could reflect a favorable view of the company's future cash flow and financial stability, although it also means capital that could be used for other investments is being directed towards share buybacks.
From a market dynamics perspective, the stock repurchase program by Golden Matrix Group Inc. can have a significant impact on the supply and demand of its shares. By buying back up to
Moreover, this strategy is often perceived positively by the market as it can indicate that the company has excess cash and limited alternative investment opportunities with comparable returns. It also suggests that the management is proactive in returning value to shareholders, which can enhance investor sentiment.
In the online gaming and eCommerce sector, where competition is intense and innovation is constant, this repurchase might redirect focus from expansion to consolidation, possibly appealing to investors looking for stable returns rather than aggressive growth. However, it's important to watch how this affects the company's long-term growth strategy and whether it impacts its ability to invest in new technologies or markets.
LAS VEGAS, NV, July 17, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire – Golden Matrix Group Inc. (NASDAQ: GMGI) (“Golden Matrix”, “GMGI” or the “Company”), an international developer, licensor and global operator of online gaming and eCommerce platforms, systems and gaming content, today announced that its Board of Directors has authorized the repurchase of up to a maximum of
“We believe the repurchase program may provide numerous benefits to the Company and its stockholders, including, among others, possibly help counteract the short interest in the Company’s common stock, mitigation of overhang on the market for the Company’s common stock, attractive use of the Company’s capital to repurchase shares at current prices, a more tax-efficient way of returning capital to shareholders compared to declaring cash dividends and accretion to earnings per share,” said Anthony Brian Goodman, Chief Executive Officer of the Company.
Under the stock repurchase program, shares may be repurchased from time to time in the open market or through negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of shares, general market conditions, the trading price of the common stock, alternative uses for capital and the Company’s financial performance. Open market purchases are expected to be conducted in accordance with the limitations set forth in Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”) and other applicable laws and regulations. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws.
The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares. There is no guarantee as to the exact number or value of shares that will be repurchased by the Company, if any.
The repurchase program is expected to be funded using the Company’s working capital. As of June 30, 2024, the Company had 120,801,977 shares of common stock issued and outstanding.
All shares purchased by the Company under the stock repurchase program will be retired and returned to treasury.
About Golden Matrix
Golden Matrix Group, based in Las Vegas NV, is an established B2B and B2C gaming technology company operating across multiple international markets. The B2B division of Golden Matrix develops and licenses proprietary gaming platforms for its extensive list of clients and RKings, its B2C division, operates a high-volume eCommerce site enabling end users to enter paid-for competitions on its proprietary platform in authorized markets. The Company also owns and operates MEXPLAY, a regulated online casino in Mexico.
Founded in 2001 and acquired by Golden Matrix in 2024, the Meridianbet Group is a well-established online sports betting and gaming group, licensed and currently operating in 15 jurisdictions across Europe, Africa and South America. Meridianbet Group’s successful business model utilizes proprietary technology and scalable systems, thus allowing it to operate in multiple countries and currencies and with an omni-channel approach to markets, including retail, desktop online and mobile.
The companies’ sophisticated software automatically declines any gaming or redemption requests from within the United States, in strict compliance with current U.S. law.
Forward-Looking Statements
Certain statements made in this press release contain forward-looking information within the meaning of applicable securities laws, including within the meaning of the Private Securities Litigation Reform Act of 1995 (“forward-looking statements”). Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.
Important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, the amount, timing, and sources of funding for the repurchase program, the fact that common share repurchases may not be conducted in the timeframe or in the manner the Company expects, or at all, the ability of the Company to obtain the funding required to pay certain Meridianbet Group acquisition post-closing obligations, the terms of such funding, potential dilution caused thereby and/or covenants agreed to in connection therewith; potential lawsuits regarding the acquisition; dilution caused by the terms of an outstanding convertible note and warrants, the Company’s ability to pay amounts due under the convertible note and covenants associated therewith and penalties which could be due under the convertible note and securities purchase agreement related thereto for failure to comply with the terms thereof; the business, economic and political conditions in the markets in which the Company operates; the effect on the Company and its operations of the ongoing Ukraine/Russia conflict and the conflict in Israel, changing interest rates and inflation, and risks of recessions; the need for additional financing, the terms of such financing and the availability of such financing; the ability of the Company and/or its subsidiaries to obtain additional gaming licenses; the ability of the Company to manage growth; the Company’s ability to complete acquisitions and the availability of funding for such acquisitions; disruptions caused by acquisitions; dilution caused by fund raising, the conversion of outstanding preferred stock, convertible securities and/or acquisitions; the Company’s ability to maintain the listing of its common stock on the Nasdaq Capital Market; the Company’s expectations for future growth, revenues, and profitability; the Company’s expectations regarding future plans and timing thereof; the Company’s reliance on its management; the fact that the sellers of the Meridianbet Group hold voting control over the Company; related party relationships; the potential effect of economic downturns, recessions, increases in interest rates and inflation, and market conditions, decreases in discretionary spending and therefore demand for our products and services, and increases in the cost of capital, related thereto, among other affects thereof, on the Company’s operations and prospects; the Company’s ability to protect proprietary information; the ability of the Company to compete in its market; the effect of current and future regulation, the Company’s ability to comply with regulations and potential penalties in the event it fails to comply with such regulations and changes in the enforcement and interpretation of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our business; the risks associated with gaming fraud, user cheating and cyber-attacks; risks associated with systems failures and failures of technology and infrastructure on which the Company’s programs rely; foreign exchange and currency risks; the outcome of contingencies, including legal proceedings in the normal course of business; the ability to compete against existing and new competitors; the ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; and general consumer sentiment and economic conditions that may affect levels of discretionary customer purchases of the Company’s products, including potential recessions and global economic slowdowns. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this press release are reasonable, we provide no assurance that these plans, intentions or expectations will be achieved.
Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly-filed reports, including, but not limited to, under the “Special Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC, including the Form 10-Qs and Form 10-Ks, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended October 31, 2023 and its Quarterly Report on Form 10-Q for the quarter ended January 31, 2024, and future periodic reports on Form 10-K and Form 10‑Q. These reports are available at www.sec.gov.
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Contact: ir@goldenmatrix.com
Golden Matrix Group Inc.
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