PLAYSTUDIOS Purchases Shares Owned by Microsoft

Rhea-AI Summary

PLAYSTUDIOS (Nasdaq: MYPS), known for its playAWARDS loyalty platform and free-to-play mobile and social games, announced the repurchase of 11,677,398 shares of its Class A common stock from Microsoft Shares were bought at $2.11 each, totaling $24.6 million, funded with available cash. This move reduces PLAYSTUDIOS' outstanding common stock by approximately 8.6%. Chairman and CEO Andrew Pascal stated that the repurchase aligns with the company's commitment to enhancing shareholder value and maximizing returns on capital, highlighting the acquisition at a discount to current market prices.

Positive

• Repurchase of 11,677,398 shares reduces outstanding common stock by 8.6%.
• Shares were acquired at $2.11 each, a discount to current market prices.
• Total consideration of $24.6 million funded with available cash, indicating strong liquidity.
• Share repurchase demonstrates a commitment to enhancing shareholder value.
• Andrew Pascal emphasized the efficient allocation of capital and maximizing returns.

Negative

• Significant cash outflow of $24.6 million for the repurchase.
• Potential reduction in cash reserves may affect future investments or liquidity.
• Repurchasing shares from a major tech company like Microsoft may signal differing strategic views.

Financial Analyst

The repurchase of $24.6 million worth of shares by PLAYSTUDIOS is a significant financial maneuver. Such buybacks often signal management's confidence in the company's future prospects. By reducing the number of outstanding shares by 8.6%, the company potentially enhances the value of remaining shares, thereby benefiting shareholders.

From a financial analysis perspective, the share buyback at $2.11 per share is notable since it was executed at a price lower than the current market value. This suggests that management believes the shares are undervalued, which can be seen as a positive indicator.

In the short term, this action might provide a boost to the stock price as it reduces the supply of available shares. In the long term, the impact of this buyback will depend on how effectively the company can use its remaining cash to generate returns. While repurchases can enhance earnings per share (EPS) metrics, they also reduce the cash reserves available for potential investments or debt repayment.

Overall, this move aligns with typical shareholder value enhancement strategies seen in the industry, though it does mean the company is foregoing other potential uses for its cash resources.

Market Research Analyst

For a retail investor, it's important to watch how the market reacts to this buyback. The fact that PLAYSTUDIOS chose to utilize available cash to repurchase shares rather than investing in business expansion or new projects might indicate a conservative approach in the current business environment.

This buyback reduces Microsoft's stake in PLAYSTUDIOS, which could be seen as a positive or negative sign depending on one's perspective. On one hand, it might raise questions about why Microsoft divested their shares. On the other hand, the reduction of a large stakeholder might lead to more diversified ownership, which can be beneficial for market liquidity and reducing potential influence from a single shareholder.

Investors should also consider the broader market context. Share repurchases are a common method to return value to shareholders, especially if the company believes it can’t achieve higher returns through other investments. However, one must evaluate if the repurchase aligns with long-term strategic goals or if it’s a short-term boost for the stock price.

LAS VEGAS--(BUSINESS WIRE)-- PLAYSTUDIOS, Inc. (Nasdaq: MYPS) (“PLAYSTUDIOS” or the “Company”), the creator of the playAWARDS loyalty platform and an award-winning developer of free-to-play mobile and social games that offer real-world rewards to players, today announced the Company has repurchased 11,677,398 shares of the Company’s Class A common stock held by Microsoft Corporation.

Shares were purchased at a price of $2.11 per share and funded with available cash. Total consideration paid by PLAYSTUDIOS was $24.6 million. The repurchase reduces the number of shares of the Company’s outstanding common stock by approximately 8.6%.

Andrew Pascal, the Company’s Chairman and CEO commented, “Since becoming a public company, PLAYSTUDIOS has demonstrated a commitment to enhancing shareholder value and maximizing our returns on capital. Purchasing the shares held by Microsoft is a further example of this as we were able to efficiently repurchase 8.6% of our outstanding common stock at a discount to current market prices.”

About PLAYSTUDIOS

PLAYSTUDIOS, Inc. (Nasdaq: MYPS), creator of the groundbreaking playAWARDS loyalty platform, is a publisher and developer of award-winning mobile games, including the iconic Tetris® mobile app, Solitaire, Spider Solitaire, and Sudoku, and its casino-style games such as myVEGAS Slots, myVEGAS Blackjack, myVEGAS Bingo, POP! Slots, MGM Slots Live, and myKONAMI Slots. The playAWARDS loyalty platform enables players to earn real-world rewards from a global collection of hospitality, entertainment, and leisure brands. playAWARDS partners include MGM Resorts International, Wolfgang Puck, Norwegian Cruise Line, Resorts World, IHG Hotels & Resorts, Bowlero, Gray Line Tours, and Hippodrome Casino among others. Founded by a team of veteran gaming, hospitality, and technology entrepreneurs, PLAYSTUDIOS apps combine the best elements of popular casual games with compelling real-world benefits. To learn more about PLAYSTUDIOS, visit www.playstudios.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240611317873/en/

Investor Relations

Samir Jain, CFA

samir.jain@playstudios.com

Media Relations

BerlinRosen

media@playstudios.com

On the web

www.playstudios.com

Source: PLAYSTUDIOS, Inc.

FAQ

What was the price per share for PLAYSTUDIOS' repurchase from Microsoft?

PLAYSTUDIOS repurchased shares at $2.11 each.

How many shares did PLAYSTUDIOS repurchase from Microsoft?

PLAYSTUDIOS repurchased 11,677,398 shares.

What was the total cost for PLAYSTUDIOS to repurchase shares from Microsoft?

The total cost was $24.6 million.

By what percentage did the repurchase reduce PLAYSTUDIOS' outstanding common stock?

The repurchase reduced the outstanding common stock by approximately 8.6%.

Why did PLAYSTUDIOS repurchase shares from Microsoft?

PLAYSTUDIOS aimed to enhance shareholder value and maximize returns on capital.