Payment processing company Exela (NASDAQ:XELA) is enjoying a strong day in the market so far on news of a stock buyback. Indeed, XELA stock is up more than 10% heading into the afternoon.
What do you need to know about Exela today?
Well, this morning Exela announced an upcoming stock buyback of up to 100 million shares, valued at $1.25 per share. This represents a 257% premium from its closing price of 35 cents per share on April 15. Investors have until May 16 of this year to exchange 20-share blocks of common stock into a $25 liquidation preference of its 6% Series B1 cumulative convertible perpetual preferred stock.
Exela is also allowing investors to convert its ownership into Series B1 preferred stock in addition to cash payments equivalent to unpaid dividends of its Series B preferred stock. This is likely the reason behind XELA’s jump today, as investors were clearly pleased by the generous buyback offer.
So, what else is going on with Exela lately?
XELA Stock Climbs on Strong Buyback Opportunity
Stock buybacks are generally considered a positive sign for a company, and today seems no different. Today’s jump comes following a generally tumultuous past year for Exela. Despite a slight jump last summer, XELA stock has been on a downward spiral for months now. Since August, shares have slid from $3.22 to today’s price of just 37 cents.
Despite its stock tumble, Exela has enjoyed several notable headlines the past few weeks. This includes a deal last week with global bank XBP Solutions to expand its mobile payment options.
Just last month the company announced the transition of Ronald C. Cogburn out of the CEO role. Instead, Par Chadha, executive chairman, will lead the company alongside Exela’s senior management team.
Clearly, Exela investors have plenty of reasons to keep a close eye on the company going forward.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
