QuantaSing Group Limited Announces up to US$20.0 Million Share Repurchase Program
QuantaSing Group (NASDAQ: QSG) has announced a share repurchase program, authorizing the buyback of up to $20 million in Class A ordinary shares over the next 12 months starting June 11, 2024.
The initiative underscores the Board’s confidence in the company's growth and aims to maximize shareholder value. Repurchases will be executed through various methods, including open market transactions and privately negotiated deals, adhering to all regulatory guidelines. Funding for the repurchases will come from the company's existing cash reserves. The Board may adjust or suspend the program based on market and business conditions.
- Authorization to repurchase up to $20 million in shares indicates strong financial health.
- Share repurchase program aims to maximize shareholder value.
- Repurchases will be financed from existing cash reserves, implying sufficient liquidity.
- Flexibility in repurchase methods (open market, private transactions) maximizes strategic opportunities.
- Repurchase program contingent on various factors like price, trading volume, and market conditions, which may limit execution.
- Potential for program suspension or discontinuation creates uncertainty for investors.
- Utilizing $20 million for buybacks could impact capital available for other investments or operational needs.
Insights
QuantaSing's announcement of a
From a financial perspective, utilizing existing cash reserves for the buyback suggests that QuantaSing has a healthy cash flow and does not foresee any immediate needs for capital that could be compromised by this expenditure. Investors should, however, consider the company's current cash position and any upcoming capital needs to assess whether the buyback is indeed the best use of funds.
In the short term, this buyback program can create upward pressure on the stock price due to increased demand for shares. In the long term, if the buyback is executed at an undervalued price, it could lead to significant capital appreciation for remaining shareholders.
From a market perspective, the share repurchase program might be seen as a strategic move to enhance shareholder value, especially in a volatile market environment. Repurchases can help stabilize the stock price by providing a floor for it, as the company commits to buying back shares whenever the price dips below a certain level.
However, the real impact on the stock price will also depend on broader market conditions and investor sentiment toward the Chinese online learning sector. This industry has seen significant growth but also faces challenges such as regulatory scrutiny and intense competition. Investors should weigh these factors alongside the buyback when making investment decisions.
From a legal standpoint, the repurchase program's adherence to regulations like Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934 is crucial. These rules are designed to prevent fraudulent and manipulative practices in stock repurchases, ensuring that the company conducts the buyback in a manner that's fair and transparent.
Investors should be aware that compliance with these rules involves specific timing, pricing and volume conditions for repurchases. Any deviation could lead to legal repercussions and negatively impact the company's reputation. Additionally, understanding the company's insider trading policy can provide insights into how it manages potential conflicts of interest during the repurchase program.
BEIJING, June 11, 2024 (GLOBE NEWSWIRE) -- QuantaSing Group Limited (NASDAQ: QSG) (“QuantaSing” or the “Company”), a leading online learning service provider in China, today announced that its board of directors (the “Board”) has authorized a share repurchase program under which the Company may repurchase up to US
“The Share Repurchase Program is well-aligned with our commitment to maximizing value for our shareholders and reflects the Board’s confidence in the Company’s continued growth and long-term prospects,” said Mr. Peng Li, QuantaSing’s Chairman and Chief Executive Officer.
Repurchases under the program may be made from time to time through open market transactions at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means. The repurchases will be subject to all applicable rules and regulations, including Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, as well as the Company’s insider trading policy. The number of ADSs repurchased and the timing of repurchases will also depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company’s working capital requirements, general business conditions and other factors. The Board will review the Share Repurchase Program periodically, and may authorize adjustment of its terms and size or suspend or discontinue the program. The Company plans to fund the repurchases from its existing cash balance.
Safe Harbor Statements
This announcement contains forward-looking statements within the meaning of Section 27A of Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1955. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding QuantaSing’s financial outlook, beliefs and expectations. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets,” “guidance” and similar statements. Among other things, the Financial Outlook in this announcement contains forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to 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. 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: the Company’s growth strategies; its future business development, results of operations and financial condition; its ability to attract and retain new users and learners and to increase the spending and revenues generated from users and learners; its ability to maintain and enhance the recognition and reputation of its brand; its expectations regarding demand for and market acceptance of its services and products; trends and competition in China’s adult learning market; changes in its revenues and certain cost or expense items; the expected growth of China’s adult learning market; PRC governmental policies and regulations relating to the Company’s business and industry, general economic and political conditions in China and globally, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the SEC, including, without limitation, the final prospectus related to the IPO filed with the SEC dated January 24, 2023. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
About QuantaSing Group Limited
QuantaSing is a leading online service provider in China dedicated to improving people’s quality of life and well-being by providing lifelong personal learning and development opportunities. The Company is the largest service provider in China’s online adult learning market and China’s adult personal interest learning market in terms of revenue, according to a report by Frost & Sullivan based on data from 2022. By leveraging its proprietary tools and technology, QuantaSing offers easy-to-understand, affordable, and accessible online courses to adult learners, empowering users to pursue personal development. Leveraging its extensive experience in individual online learning services and its robust technology infrastructure, the Company has expanded its services to corporate clients, and diversified its operations into its e-commerce business and its AI and technology business.
For more information, please visit: https://ir.quantasing.com.
Contact
Investor Relations
Leah Guo
QuantaSing Group Limited
Email: ir@quantasing.com
Tel: +86 (10) 6493-7857
Robin Yang, Partner
ICR, LLC
Email: QuantaSing.IR@icrinc.com
Phone: +1 (212) 537-0429
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