- Ever-Glory International to buy back $5 million worth of common stock…
- Share price more than doubles on news…
- CEO says the stock has been undervalued…
Ever-Glory International Group Inc (NASDAQ: EVK) rallies after the company announced a massive share buyback.
EVK stock rose as much as 165% in today’s session and was still up 135% at writing.
The penny stock rally comes after Ever-Glory announced it will repurchase up to $5 million worth of common stock before year-end.
The company said that buyback can be conducted “from time to time through various means, including open market transactions and privately negotiated transactions.”
Ever-Glory said, “open market repurchases will be made in accordance with applicable securities laws and regulations.”
All of the details for each repurchase “will be determined by the Company’s management in its discretion based on its evaluation of various factors, including the trading price of the Company’s common stock, market and economic conditions, regulatory requirements, and other corporate considerations.”
Ever-Glory also said the program “may be suspended or discontinued at any time.”
Yihua Kang, Chairman, President, and CEO of Every-Glory said, “We believe our stock is a good value, and the Board’s approval of this stock repurchase program is recognition of the long-term prospects in our Company’s intrinsic value and the undervalued price of our stock. Repurchasing stock underscores our commitment to enhancing shareholder value and demonstrates confidence in our business.”
What Are Stock Buybacks?
A buyback is when a publicly traded company repurchases shares from existing stockholders in cash, re-absorbing that portion of ownership of the company.
Buybacks are a way to return cash to shareholders and according to Investopedia, have overtaken dividends in recent years as the preferred method of doing so.
Buybacks are typically conducted in two ways, a tender offer or an open market purchase.
A tender offer is a private transaction with a shareholder which begins with an offer from the company for how many shares it wants to repurchase and at what price range.
Shareholders who then accept that offer will state how many shares they would like to sell and their price.
The company then chooses between all of the offers.
In an open market repurchase, a company simply purchases shares at the current market price.
Typically this type of transaction can be more expensive, as the share price will usually shoot higher on news of a buyback — case in point, EVK stock today.
Ever-Glory said it will conduct both types of repurchases.
EVK Stock Top Ten
- Ever-Glory International Group was founded in 1994 and is headquartered in Nanjing, China.
- The company is “a retailer of branded fashion apparel and a leading global apparel supply chain solution provider.”
- Ever-Glory says it was the first Chinese company listed on the American Stock Exchange in July 2008.
- EVK stock was then transferred to the Nasdaq on December 31, 2015.
- Ever-Glory has three women’s apparel lines in China, “La go go”, “Velwin” and “idole”.
- It operates over 921 retail locations in China.
- The company says it is “a leading global apparel supply chain solution provider with a focus on middle-to-high end casual wear, outerwear, and sportswear brands.”
- Its supply chain management services include fabric development and design, sampling, sourcing, quality control, manufacturing, logistics, customs clearance, and distribution.
- EVK stock closed at $2.26 per share on Friday and opened trading today at $4.46 per share.
- With today’s jump, shares are up 340% over the last year.
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