Wix Announces Completion of $300 Million in Share Repurchases
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Insights
The completion of a $300 million share repurchase by Wix.com Ltd. represents a significant capital allocation decision that likely reflects the management's confidence in the company's financial health and future prospects. By repurchasing 4% of its total shares outstanding, Wix is effectively concentrating the ownership among existing shareholders, which can be beneficial if the company's earnings per share (EPS) increase as a result of the reduced share count.
Investors often view share buybacks as a positive signal, as it suggests that the company believes its shares are undervalued and that it is a better use of capital than other investment opportunities. This can lead to a short-term increase in the stock price. However, the long-term impact depends on whether the repurchased shares were indeed undervalued and if the company can sustain its growth without the need for that capital. The volume-weighted average price of $124.91 will be a key figure to watch, as it provides a benchmark for evaluating the buyback's success over time.
Wix's decision to allocate 50% of projected free cash flow through 2025 for further share repurchases is an aggressive strategy that underscores the company's focus on shareholder returns. It is essential to consider the context within the tech industry, where companies often reinvest heavily into growth and R&D. Wix's strategy might indicate a maturing business model or a lack of attractive investment opportunities to fuel growth.
Market perception of such a strategy will vary; some investors might appreciate the return of capital, while others could be concerned about the long-term growth implications. The exclusion of costs associated with the company's new headquarters office build-out from free cash flow calculations for repurchases is also noteworthy. This suggests that Wix is making a clear distinction between one-time capital expenditures and ongoing operational cash flow, which could impact how investors assess the company's financial sustainability and growth trajectory.
The Company repurchased 2,401,695 outstanding Wix ordinary shares, representing approximately
Pursuant to its Board of Directors' authorization of share repurchases of
About Wix.com Ltd.
Wix is the leading SaaS website builder platform to create, manage, and grow a global, digital presence1. What began as a website builder in 2006 is now a complete platform providing self-creators, agencies, and enterprises, with distinguished performance, security, and a reliable infrastructure. With a focus on continuous innovation, a wide range of commerce and business solutions, advanced SEO, marketing tools, and industry-leading AI technologies, Wix users have full ownership of their brand and unmatched creative freedom. Complimenting the Wix platform for self-creators, Wix Studio is an advanced creation and management platform for agencies and freelancers.
For more about Wix, please visit our Press Room at https://www.wix.com/press-room/home.
Investor Relations: ir@wix.com
Media Relations Contact: PR@wix.com
1 Based on number of active live sites as reported by competitors' figures, independent third-party-data and internal data as of Q3 2023.
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SOURCE Wix.com Ltd.
FAQ
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