MOGU Announces US$8 Million Share Repurchase Program

Rhea-AI Summary

MOGU, a KOL-driven online fashion and lifestyle destination in China, announced a share repurchase program authorized by its board of directors. The company plans to repurchase up to US$8 million worth of its ordinary shares in the form of American Depositary Shares until May 13, 2025. This initiative will be funded from MOGU’s existing cash balance. The repurchases can occur on the open market, in privately negotiated transactions, block trades, or other legally permissible means based on market conditions. The board will periodically review and potentially adjust the program’s terms and size.

Positive

• Share repurchase program of up to US$8 million authorized.
• Repurchases to be funded by existing cash balance.
• Program flexibility to repurchase shares on open market, private transactions, or block trades.
• Board will review and may adjust program's terms and size periodically.

Negative

• Potential risk of share price volatility due to open market repurchases.
• Repurchase program might not significantly impact stock price positively if market conditions are unfavorable.
• No guaranteed improvement in financial performance solely from share repurchases.

Insights

Financial Analyst

Share repurchase programs are often viewed positively by the market as they signal that the company believes its stock is undervalued. By buying back shares, the company reduces the number of outstanding shares, which typically increases earnings per share (EPS) and can potentially lead to a higher stock price. This can be particularly beneficial for investors as it often results in a short-term boost to the stock price.

MOGU's decision to allocate US$8 million for share buybacks is significant given its market cap and cash balance. However, investors should closely monitor the execution of this plan, as repurchases over an extended period could lead to market fluctuations depending on how and when they are conducted. It is important to consider the company's overall financial health and long-term strategy.

Moreover, MOGU's commitment to reviewing and potentially adjusting the program suggests a flexible and responsive approach, which can be advantageous in volatile markets. However, caution is advised as this flexibility also implies that the program might not fully materialize if market conditions are unfavorable.

Market Research Analyst

The approval of a share repurchase program by MOGU indicates potential confidence from the board in the company's future performance. For retail investors, it’s important to note that repurchase programs can also be a method to return value to shareholders, especially when other avenues such as dividends are not preferred or feasible.

The reference to market conditions and the possibility of repurchases being made through various means, including open market and block trades, suggests MOGU aims to optimize the repurchase process. Investors should watch for any changes in trading volumes and stock price volatility as the company conducts these buybacks.

Additionally, this move might be indicative of MOGU's strategy to maintain or enhance shareholder value amidst current market conditions. Given the recent impact of economic factors on the retail sector, this could be a strategic effort to stabilize or potentially improve market perception and investor confidence in the company.

HANGZHOU, China--(BUSINESS WIRE)-- MOGU Inc. (NYSE: MOGU) (“MOGU” or the “Company”), a KOL-driven online fashion and lifestyle destination in China, today announced that its board of directors has authorized a new share repurchase program, where the Company is authorized to repurchase up to US$8 million of its ordinary shares in the form of American Depositary Shares, effective until May 13, 2025. The Company expects to fund the repurchases under this program with its existing cash balance.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company’s board of directors will review the share repurchase program periodically, and may authorize adjustment to its terms and size.

About MOGU Inc.

MOGU Inc. (NYSE: MOGU) is a KOL-driven online fashion and lifestyle destination in China. MOGU provides people with a more accessible and enjoyable shopping experience for everyday fashion, particularly as they increasingly live their lives online. By connecting merchants, KOLs and users together, MOGU’s platform serves as a valuable marketing channel for merchants, a powerful incubator for KOLs, and a vibrant and dynamic community for people to discover and share the latest fashion trends with others, where users can enjoy a truly comprehensive online shopping experience.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. MOGU may also make written or oral forward-looking statements in its filings with the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about MOGU’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in our annual report on Form 20-F, the 6-K and other documents filed with the SEC. All information provided in this press release is as of the date of this press release, and MOGU does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514240273/en/

For investor and media inquiries, please contact:



MOGU Inc.

Ms. Qi Feng

+86-571-8530-8201

ir@mogu.com

Christensen

In China

Ms. Crystal Lai

Phone: +852 2232 3907

E-mail: crystal.lai@christensencomms.com



In the United States

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: linda.bergkamp@christensencomms.com

Source: MOGU Inc.

FAQ

What is the value of MOGU's new share repurchase program?

MOGU's new share repurchase program is valued at up to US$8 million.

Until when is MOGU's share repurchase program effective?

MOGU's share repurchase program is effective until May 13, 2025.

How will MOGU fund its share repurchase program?

MOGU will fund the share repurchase program with its existing cash balance.

In what ways can MOGU execute its share repurchases?

MOGU can execute share repurchases on the open market, in private transactions, block trades, or other legally permissible means.

Will MOGU's board review the share repurchase program?

Yes, MOGU's board will periodically review and may adjust the share repurchase program's terms and size.