PLAYSTUDIOS Purchases Shares Owned by Microsoft
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.
- 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.
- 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.
Insights
The repurchase of
From a financial analysis perspective, the share buyback at
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.
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.
Shares were purchased at a price of
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
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?
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What was the total cost for PLAYSTUDIOS to repurchase shares from Microsoft?
By what percentage did the repurchase reduce PLAYSTUDIOS' outstanding common stock?
Why did PLAYSTUDIOS repurchase shares from Microsoft?
