Udemy Announces Share Repurchase Program
- None.
- None.
Insights
A share repurchase program, such as the one announced by Udemy, is a strong signal to the market, often interpreted as the company's belief in its undervalued stock. It can be seen as a method to return capital to shareholders, effectively increasing their ownership percentage and potentially boosting the stock price. The announcement indicates a robust financial position, given the mention of a strong balance sheet that allows for such flexibility. In the short-term, this action may lead to a positive market reaction, as it suggests management's confidence in the company's prospects.
From a financial perspective, it's important to analyze the impact on earnings per share (EPS). By reducing the number of shares outstanding, EPS may increase, which is an attractive metric for investors. However, one must also consider the opportunity cost of this use of capital. The decision to repurchase shares rather than reinvesting in the business or pursuing acquisitions could be questioned if the company forgoes potential growth opportunities.
Understanding the broader context of Udemy's market is essential. As an online learning platform, Udemy operates in a highly competitive and evolving industry. The company's decision to allocate funds for stock repurchase must be weighed against the need for continuous innovation and expansion to stay ahead. The long-term strategy mentioned by the CEO should ideally balance shareholder returns with strategic investments in content, technology and market expansion.
Investors should consider the impact of this repurchase on the company's ability to adapt to changing market demands, such as the increasing need for upskilling and reskilling due to automation and the digital transformation of the workforce. The repurchase program could signal a maturation phase for Udemy, where it focuses more on profitability and less on aggressive growth.
Udemy's adherence to Rule 10b-18 and Rule 10b5-1 is a critical aspect of the share repurchase program. These rules are designed to prevent stock manipulation and insider trading by providing safe harbors for companies. Rule 10b5-1 allows insiders of publicly traded corporations to set up a trading plan for selling stocks they own. By establishing such a plan, insiders can avoid accusations of insider trading, as the trades are made under a pre-established plan.
For stakeholders, the legal compliance of this repurchase program provides reassurance about the ethical management of the company. However, it is also important to note that the program's flexibility, including the possibility of suspension or discontinuation, allows the company to respond to changing circumstances, which can introduce a degree of uncertainty for investors.
Program authorizes the purchase of up to
SAN FRANCISCO, Feb. 14, 2024 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading online skills marketplace and learning platform, today announced its Board of Directors approved a share repurchase program, authorizing the purchase of up to
“This share repurchase program underscores the confidence that our Board and management team have in our business and the future of Udemy, and reinforces our commitment to deliver returns for Udemy shareholders,” said Greg Brown, Udemy’s President and CEO. “Our strong balance sheet provides us with the flexibility to repurchase shares, while continuing to drive shareholder value through execution of our long-term strategy.”
The timing and amount of any shares of the Company’s common stock that are repurchased under the repurchase program will be determined by the Company’s management based on its evaluation of market conditions and other factors. Shares may be acquired from time to time in the open market, through privately negotiated transactions or otherwise in compliance with Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934. The Board of Directors also authorized the Company to establish Rule 10b5-1 trading plans that permit the Company to repurchase its outstanding shares at times when it might otherwise be prevented from doing so. The repurchase program may be suspended or discontinued at any time.
About Udemy
Udemy (Nasdaq: UDMY) improves lives through learning by providing flexible, effective skill development to empower organizations and individuals. The Udemy marketplace platform, with thousands of up-to-date courses in dozens of languages, offers the tools learners, instructors and enterprises need to achieve their goals and reach their full potential. Millions of people learn on the Udemy platform from real-world experts in topics ranging from programming and data science to leadership and team building. Udemy Business enables employers to offer on-demand learning for all employees, immersive learning for tech teams and cohort learning for leaders. Udemy Business customers include Fender®, Glassdoor, On24, The World Bank and Volkswagen. Udemy is headquartered in San Francisco with hubs in Ankara and Istanbul, Türkiye; Austin, Texas; Denver, Colorado; Dublin, Ireland; Melbourne, Australia; and New Delhi, India.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding Udemy’s expectations relating to future operating results and financial position, including the second quarter of 2023, the full year 2023, and future periods; anticipated future expenses and investments; our business strategy and plans; market growth; and our market position and potential market opportunities. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.
The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission (“SEC”), including, without limitation, our Quarterly Report on Form 10-Q for the period ended September 30, 2023, filed with the SEC on November 2, 2023. All information provided in this release is as of the date hereof, and we undertake no duty to update this information unless required by law.
Investor Contact:
Dennis Walsh
Vice President, Investor Relations
dennis.walsh@udemy.com
FAQ
What did Udemy announce regarding its stock?
Who approved the share repurchase program at Udemy?
How much stock is Udemy authorized to repurchase?
When does the share repurchase program at Udemy become effective?
What is the purpose of Udemy's share repurchase program?
