Mogo to resume share repurchases under NASDAQ buyback program
Mogo Inc. announces the resumption of share repurchases under its buyback program on NASDAQ after releasing Q4 & FY 2023 financial results. The Company repurchased 474,353 common shares in 2023 at an average price of $2.36 per share. Including previous repurchases, Mogo has bought back 1,074,353 shares to date, representing 4.4% of outstanding shares. The Company aims to enhance long-term shareholder value by repurchasing undervalued shares.
The announcement by Mogo Inc. regarding the resumption of share repurchases signals a strong message to the market about the company's self-assessment of its stock value. By buying back shares, the company is essentially conveying that it believes its shares are currently undervalued.
From a market research perspective, such actions can often lead to an increase in the stock price due to the reduced number of shares available in the market, which increases the earnings per share (EPS). Moreover, it's a signal to investors that the company has sufficient cash reserves and is confident in its financial health and future outlook. This can be particularly reassuring in volatile markets or when investor sentiment is low.
However, it's important to consider the opportunity cost of this capital allocation decision. The funds used for share repurchases could alternatively be used for investment in growth opportunities, R&D, or debt reduction. The effectiveness of this strategy also largely depends on the timing of the buybacks and the company's ability to accurately assess its intrinsic value.
From a financial analysis standpoint, the repurchase of 1,074,353 common shares, which represents 4.4% of Mogo's current outstanding shares, is a non-negligible move that could impact the company's balance sheet. The average repurchase price of $2.36 per share suggests the company is attempting to manage its capital structure efficiently.
The additional capacity of US$7.5MM under the program indicates that Mogo is prepared to further invest in its own equity, which could be a strategic move to consolidate ownership and potentially increase return on equity (ROE). Investors often interpret buybacks as a sign of a company's leadership confidence in the business's prospects, which can be a positive driver for the stock's performance in the short term.
Long-term implications, however, will depend on the company's ability to sustain growth and profitability. The reference to the 13% ownership in WonderFi also highlights the company's investment in the cryptocurrency exchange sector, which adds a layer of diversification to their business model but also introduces an element of risk given the volatility of crypto markets.
03/21/2024 - 09:18 AM
Company has approximately US$7 .5MM additional capacity under program
VANCOUVER, British Columbia --(BUSINESS WIRE)--
Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) (“Mogo” or the “Company”), a digital wealth and payments business, today announced that it intends to resume share repurchases under its share buyback program on NASDAQ following the release of its Q4 & FY 2023 financial results.
In 2023, the Company repurchased and cancelled 474,353 common shares under its share buyback program on NASDAQ and its normal course issuer bid on the Toronto Stock Exchange at an average price of $2.36 4.4% of the Company’s current outstanding common shares. The Company currently has 24.5 million common shares issued and outstanding.
Mogo is repurchasing common shares under the buyback program because it continues to believe that the market price of its common shares does not accurately reflect their underlying value and the repurchasing for cancellation of such common shares is intended to enhance long-term shareholder value.
“We expect to remain active with our NASDAQ buyback program given we continue to believe our shares are undervalued, especially considering the recent progress, results and growth outlook in our core business, in addition to our 13% ownership in WonderFi, Canada’s only fully regulated crypto exchange,” said Greg Feller, President & CFO.
About Mogo
Mogo Inc. (NASDAQ:MOGO; TSX:MOGO) is a financial technology company headquartered in Vancouver, Canada . With more than 2 million members, $9.9B 13% equity stake in Canada’s leading Crypto Exchange WonderFi (TSX:WNDR), Mogo offers simple digital solutions to help its members dramatically improve their path to wealth-creation and financial freedom. Mogotrade offers commission-free stock trading that helps users thoughtfully invest based on a Warren Buffett approach to long-term investing – and make a positive impact with every investment. Moka offers Canadians a real alternative to mutual funds that overcharge and underperform with a passive investing solution based on a S&P 500 strategy at a fraction of the cost. Through its wholly owned digital payments subsidiary, Carta Worldwide , Mogo also offers a low-cost payments platform that powers next-generation card programs for companies across Europe and Canada . The Company, which was founded in 2003, has approximately 200 employees across its offices in Vancouver , Toronto , London & Casablanca .
Forward-Looking Statements
This news release may contain “forward-looking statements” within the meaning of applicable securities legislation, including statements regarding future activity under the Company’s share buyback program. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the time of preparation, are inherently subject to significant business, economic and competitive uncertainties and contingencies, and may prove to be incorrect. Forward-looking statements are typically identified by words such as "may", "will", "could", "would", "anticipate", "believe", "expect", "intend", "potential", "estimate", "budget", "scheduled", "plans", "planned", "forecasts", "goals" and similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Mogo’s growth, its ability to expand into new products and markets and its expectations for its future financial performance are subject to a number of conditions, many of which are outside of Mogo’s control. For a description of the risks associated with Mogo’s business please refer to the “Risk Factors” section of Mogo’s current annual information form, which is available at www.sedarplus.com and www.sec.gov . Except as required by law, Mogo disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321315143/en/
Craig Armitage
investors@mogo.ca
New York | Phoenix
shamsian@lythampartners.com
Source: Mogo Inc.
Mogo repurchased 474,353 common shares in 2023.
Mogo repurchased shares at an average price of $2.36 per share in 2023.
Mogo has repurchased 1,074,353 common shares to date, representing 4.4% of outstanding shares.
Mogo believes that the market price of its common shares does not accurately reflect their underlying value, aiming to enhance long-term shareholder value.
Mogo decided to resume share repurchases on NASDAQ after releasing its Q4 & FY 2023 financial results.
