Qudian Inc. Announces up to US$300 Million Share Repurchase Program

Rhea-AI Summary

Qudian Inc. announces a $300 million share repurchase program to buy back its outstanding American depositary shares and Class A ordinary shares over the next 36 months, starting from June 13, 2024.

Insights

Financial Analyst

The announcement from Qudian Inc. regarding a share repurchase program of up to US$300 million represents a significant capital allocation decision that could signal to the market a self-perception of undervaluation by the company's management. Share buybacks are often employed by companies that believe their stock is undervalued and wish to return capital to shareholders in a tax-efficient manner. By reducing the number of shares outstanding, earnings per share (EPS) and other financial metrics may improve, potentially leading to a higher stock price.

However, the effectiveness of such programs largely depends on the timing and the prices at which shares are repurchased. If executed during periods of undervaluation, buybacks can be accretive to shareholder value. Conversely, repurchasing shares at inflated prices can destroy shareholder value. Investors should monitor the company's execution of this program, particularly how it aligns with market conditions and the company's operational performance.

Market Research Analyst

Qudian's decision to implement a share repurchase program could be reflective of broader industry trends where consumer-oriented technology companies are looking to leverage their cash reserves to instill investor confidence. This move might be interpreted as a positive signal, suggesting that the company's leadership believes in the long-term growth and profitability of the business.

It's important to note that while repurchase programs can be an indication of financial strength, they also reduce the capital available for investment in growth opportunities. Investors should consider how this buyback aligns with Qudian's strategic plans and whether it indicates a lack of viable investment opportunities within the company or its market segment.

Corporate Governance Expert

The governance aspect of Qudian's share repurchase program is also worth noting. The board's decision to buy back shares should be evaluated in the context of the company's overall governance practices and transparency. The use of mechanisms such as Rule 10b5-1 plans can help mitigate concerns about potential insider trading, as they allow companies to repurchase shares at pre-determined times and prices, reducing the risk of opportunistic buybacks.

Investors should assess the board's oversight of the repurchase program, including the periodic review and potential adjustment of its terms, as these are critical for ensuring that the program is conducted in the best interest of all shareholders and aligns with the company's long-term strategic objectives.

XIAMEN, China, March 18, 2024 /PRNewswire/ -- Qudian Inc. ("Qudian" or "the Company" or "We") (NYSE: QD), a consumer-oriented technology company, today announced that its board of directors has authorized a share repurchase program under which the Company may repurchase up to US$300 million worth of its outstanding (i) American depositary shares ("ADSs"), each representing one Class A ordinary share, and/or (ii) Class A ordinary shares over the next 36 months starting from June 13, 2024.

Under the share repurchase program, the Company may repurchase its ADSs from time to time through open market transactions at prevailing market prices, privately negotiated transactions, block trades or any combination thereof. In addition, the Company will also effect repurchase transactions in compliance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and its insider trading policy. The number of ADSs repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, share price, trading volume and general market conditions, along with the Company's working capital requirements and general business conditions. The Company's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The Company plans to fund the repurchases from its existing cash balance and does not expect the repurchase program to adversely affect its existing business strategies.

About Qudian Inc.

Qudian is a consumer-oriented technology company. The Company historically focused on providing credit solutions to consumers. Qudian is exploring innovative logistics services to satisfy consumers' demand for e-commerce transactions by leveraging its technology capabilities.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States 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. Among other things, the expectation of its collection efficiency and delinquency, contain forward-looking statements. Qudian may also make written or oral forward-looking statements in its periodic reports to 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 Qudian's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Qudian's goal and strategies; Qudian's expansion plans; Qudian's future business development, financial condition and results of operations; Qudian's expectations regarding demand for, and market acceptance of, its products; Qudian's expectations regarding keeping and strengthening its relationships with customers, business partners and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Qudian's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Qudian does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

In China:
Qudian Inc.
Tel: +86-592-596-8208
E-mail: ir@qudian.com

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SOURCE Qudian Inc.

FAQ

What did Qudian Inc. announce regarding its shares?

Qudian Inc. announced a share repurchase program to buy back up to $300 million worth of its outstanding American depositary shares and Class A ordinary shares over the next 36 months.

When will the share repurchase program start?

The share repurchase program will start from June 13, 2024, and will last for 36 months.

How will Qudian Inc. fund the share repurchases?

Qudian Inc. plans to fund the share repurchases from its existing cash balance.

What factors will determine the number and timing of share repurchases?

The number of share repurchases and the timing will depend on factors like share price, trading volume, general market conditions, working capital requirements, and general business conditions.