Wetouch Technologies Inc. Announces $15 Million Stock Buyback Program

Rhea-AI Summary

Wetouch Technologies (NASDAQ: WETH) has announced a $15 million stock buyback program, allowing the company to repurchase its common stock in the open market or through privately negotiated transactions. This move is seen as a strategic effort to return value to shareholders, as the company currently holds over $90 million in cash and nearly $8 per share in cash, yet its market capitalization is under $30 million. CEO Zongyi Lian emphasized that the buyback reflects confidence in Wetouch's strong and growing business, positioning the stock as significantly undervalued in the market. The program offers flexibility as it can be suspended, modified, or discontinued at any time.

Positive

• Announcement of a $15 million stock buyback program.
• Company holds over $90 million in cash.
• Nearly $8 per share in cash compared to a market cap of less than $30 million.
• Buyback reflects confidence in the company's strong and growing business.
• Opportunity to return value to shareholders.

Negative

• No obligation to repurchase any specific number of shares.
• Buyback program may be suspended, modified, or discontinued at any time.

Insights

Financial Analyst

Stock buyback programs can be a significant indicator of a company's confidence in its own financial health. By repurchasing its own shares, Wetouch Technologies Inc. aims to reduce the supply of its stock in the market, which can potentially drive up the stock price. This move is generally seen as a way to return value to shareholders since fewer shares available in the market typically means that earnings per share (EPS) will increase, all else being equal.

Wetouch has a strong cash position with over $90 million in cash reserves and a market capitalization of less than $30 million. This indicates that the company has ample liquidity to execute the repurchase without jeopardizing its financial stability. It also suggests that the company's management believes the stock is undervalued, making it an attractive investment even for themselves.

While the buyback can boost investor confidence and potentially lead to a higher stock price in the short-term, it's important to keep in mind that buybacks do not necessarily imply long-term growth prospects. Investors should consider other factors such as revenue growth, profit margins and market expansion plans to get a fuller picture of the company's future.

Market Research Analyst

Touch display technology is a rapidly evolving industry with significant competition. Wetouch Technologies positioning itself as an innovator in this field is promising. However, it's essential to scrutinize whether the company's technological advancements translate into actual market demand and sales growth.

From a market perspective, the buyback program can act as a positive signal to investors, reinforcing the perception that Wetouch's management is committed to enhancing shareholder value. However, the effectiveness of this strategy depends on market conditions and investor sentiment. If the broader market is underperforming or if there's skepticism about the touch display market's growth potential, the buyback might not have the desired effect.

Investors should also watch for any future announcements regarding new product releases, partnerships, or market expansions. These factors could provide more substantial insights into the company's long-term growth potential beyond the immediate impact of the stock buyback.

CHENGDU, China, July 8, 2024 /PRNewswire/ -- Wetouch Technologies Inc. (NASDAQ: WETH) ("Wetouch" or the "Company"), a leading innovator in the global touch display industry, today announced a stock buyback program to repurchase up to $15 million of the Company's common stock.

Under the program, the Company is authorized to repurchase its shares from time to time in the open market or in privately negotiated transactions. The timing and amount of any repurchases will depend on a variety of factors, including price, trading volume, general market conditions, and other corporate considerations. The repurchase program does not obligate the Company to repurchase any specific number of shares and may be suspended, modified, or discontinued at any time without prior notice.

"We are pleased to announce this stock buyback program, which reflects our confidence in the strong and growing business of Wetouch," said Zongyi Lian, CEO of Wetouch Technologies Inc. "With over $90 million in cash and nearly $8 per share in cash,  however  the market capitalization is less than $30 million, we believe our stock is significantly undervalued. This buyback program represents an attractive opportunity to return value to our shareholders."

About WeTouch Technology Inc.

Wetouch Technology Inc. is at the forefront of providing premium touch display solutions, dedicated to reshaping human-machine interaction across diverse industries. With a relentless focus on innovation and customer satisfaction, Wetouch consistently delivers cutting-edge technology and unparalleled performance in touch display solutions globally.

For additional information, please visit: WeTouch Technology Inc.at http://en.usa-wetouch.com/

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and as defined in the U.S. 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", "target", "going forward", "outlook," "objective" and similar terms. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and which are beyond Wetouch's control, which may cause Wetouch's actual results, performance or achievements  (including the RMB/USD value of its anticipated benefit to Wetouch as described herein) to differ materially and in an adverse manner from anticipated results contained or implied in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Wetouch's filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov. Wetouch does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

For more information, please contact:

Horizon Research Management Consultancy
Michael Wei,
Email: hwey@horizonconsultancy.co

 

View original content:https://www.prnewswire.com/news-releases/wetouch-technologies-inc-announces-15-million-stock-buyback-program-302190838.html

SOURCE Wetouch Technology Inc.

FAQ

What is the purpose of Wetouch Technologies' $15 million stock buyback program?

The purpose is to return value to shareholders and capitalize on the stock being significantly undervalued.

How much cash does Wetouch Technologies currently hold?

Wetouch Technologies holds over $90 million in cash.

What is the market capitalization of Wetouch Technologies?

The market capitalization of Wetouch Technologies is less than $30 million.

Can Wetouch Technologies suspend or modify the buyback program?

Yes, the buyback program can be suspended, modified, or discontinued at any time without prior notice.

How does the stock buyback program reflect Wetouch Technologies' business outlook?

The buyback program reflects the company's confidence in its strong and growing business.