FAST NEWS: Cango announces new $50 million share repurchase plan
The Latest: Car trading platform operator Cango Inc. (CANG.US) on Tuesday announced a new program to purchase up to $50 million worth of its American depositary shares (ADS) on the open market over the next 12 months.
Looking Up: Based on Cango’s latest market value of about $180 million, the share repurchase could boost its stock price by eventually removing up to 28% of its shares from the market.
Take Note: The company purchased $44.6 million worth of its shares under a similar $50 million repurchase plan a year ago. Since announcing the plan, its stock price has risen about 14%.
Digging Deeper: Cango started out as an auto financier, but later shifted gears and now operates a car-trading platform. The company has become relatively cautious recently due to a slowdown in China’s car market that has pushed many companies into the red as a result of stiff competition. Cango is also relatively cash-rich, with 3.3 billion yuan ($455 million) in cash and short-term investments at the end of last year. Aside from the two share buybacks worth a collective $100 million and two previous ones each worth $50 million, the company has also returned some of its cash to shareholders through two large special dividends in 2022.
Market Reaction: Cango shares fell 0.8% in Tuesday trading after the announcement. The stock now trades in the middle of its 52-week range.
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Reporting by Doug Young
