Surely, it’s not just a coincidence. Only a few days ago, Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) CEO Warren Buffett defended the common corporate practice of share repurchases. Now, Mobilicom (NASDAQ:MOB) stock is moving higher after the company announced its own share buyback program.
Mobilicom provides cybersecurity and other tech solutions for drones, robotics and autonomous platforms. The company has corporate clients but also serves governments, including military entities. Furthermore, Mobilicom derives its revenue “from hardware, software sales & licensing fees and professional support services for its solutions.”
Reportedly, Mobilicom “undertook a strategic and operational review of its business operations” at the end of 2022. This has resulted in the company deciding to “further strengthen its efficient capital management and shareholder value” through various steps, including a share buyback.
The company calls the buyback a “share buyback of small parcel holdings.” This includes holdings of Mobilicom shares that are listed on the Australian Securities Exchange (ASX).
Let’s take a closer look at the market’s response to Mobilicom’s announcement.
What’s Happening With MOB Stock?
MOB stock rallied and briefly touched $2 this morning before pulling back slightly. Now, shares are up about 12% for the day. Clearly, financial traders are pleased with Mobilicom’s disclosure of a share buyback.
The press release doesn’t mention the exact amount of Mobilicom’s share buyback. Nevertheless, it’s not difficult to figure out why investors are enthused about the announcement.
Just a few days ago, Berkshire Hathaway published its annual letter to the company’s shareholders. In it, Buffett vigorously defended corporate share repurchases.
Buffett is a icon in the world of investing and his letters are widely read and highly regarded. In Berkshire’s recently released letter, Buffett declared that “Gains from value-accretive repurchases, it should be emphasized, benefit all owners – in every respect.”
Consequently, share buybacks have been a hot topic lately. As a result, MOB stock traders are overwhelmingly bullish on Mobilicom’s share repurchase announcement. Many of them are hitting the “buy” button today.
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On the date of publication, David Moadel 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.
