Mogo repurchases 4.4% of outstanding shares since June 2022
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Insights
Share buyback programs are a significant indicator of a company's confidence in its own stock and are often viewed positively by the market. Mogo Inc.'s repurchase of 474,353 shares in 2023, following a buyback of 600,000 shares in 2022, suggests a strategic effort to consolidate ownership and boost shareholder value. By reducing the number of shares outstanding, the company is effectively increasing the earnings per share (EPS), which could lead to a higher stock price if the market perceives the buyback as a sign of strength.
Moreover, the authorization to repurchase up to 1.7 million additional shares until March 2024 indicates a continued commitment to this strategy. It's also important to note the company's specific reference to the share price not accurately reflecting the underlying value of the business, including its stake in WonderFi. This could imply that the management believes the stock is undervalued, providing a potential investment opportunity. However, investors should consider the company's overall financial health, including its cash reserves and debt levels, to assess if the buybacks are a prudent use of capital.
The fintech sector is highly competitive and is driven by innovation, customer adoption and regulatory changes. Mogo Inc.'s buyback program, coupled with its ownership in WonderFi, positions the company within two dynamic segments: fintech and cryptocurrency. The company's decision to repurchase shares could be seen as a maneuver to stabilize the stock price amidst the volatility commonly associated with tech and crypto markets.
Investors should be aware of the broader market trends, including interest rates, which could affect consumer borrowing and spending habits, potentially impacting companies like Mogo. Additionally, the consolidation in shares resulting from the buyback could make the company a more attractive target for potential mergers or acquisitions, which is a factor to watch in the fintech space.
From an economic perspective, share buyback programs can reflect broader economic conditions. Mogo Inc.'s program may signal not only confidence in the company's financial performance but also a strategic allocation of capital in a low-interest-rate environment. As rates rise, buybacks funded by debt could become less attractive, but for now, it seems Mogo is taking advantage of the current economic climate.
Furthermore, the impact of such buybacks on the market can be multiplicative. As companies like Mogo repurchase shares, it can contribute to a reduction in market liquidity, potentially leading to increased share price volatility. Investors should weigh these macroeconomic factors when considering the long-term implications of Mogo's buyback program.
Company repurchased a total of 474,353 shares in 2023 and 600,000 shares in 2022
1.7 million additional shares (or
Exchange |
Shares Repurchased in 2023 |
Average Price |
NASDAQ |
369,553 |
|
TSX |
104,800 |
CA |
“We expect to remain active with our buyback programs while our shares do not accurately reflect the underlying value of our business – both the core business and our
All common share amounts and prices referred to in this press release have been adjusted to reflect the Company's 3:1 share consolidation that was implemented in August 2023.
About Mogo
With more than 2 million members and
Forward-Looking Statements
This news release may contain “forward-looking statements” within the meaning of applicable securities legislation, including statements regarding future activity under the Company’s share buyback programs. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the time of preparation, are inherently subject to significant business, economic and competitive uncertainties and contingencies, and may prove to be incorrect. Forward-looking statements are typically identified by words such as "may," "will," "could," "would," "anticipate," "believe," "expect," "intend," "potential," "estimate," "budget," "scheduled," "plans," "planned," "forecasts," "goals" and similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Mogo’s growth, its ability to expand into new products and markets and its expectations for its future financial performance are subject to a number of conditions, many of which are outside of Mogo’s control. For a description of the risks associated with Mogo’s business please refer to the “Risk Factors” section of Mogo’s current annual information form, which is available at www.sedarplus.com and www.sec.gov. Except as required by law, Mogo disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240102219130/en/
For further information:
Craig Armitage
Investor Relations
investors@mogo.ca
(416) 347-8954
US Investor Relations
Lytham Partners, LLC
Ben Shamsian
shamsian@lythampartners.com
(646) 829-9701
Source: Mogo Inc.
FAQ
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Why does Mogo plan to remain active with its buyback programs?
