If you’re an investor of Ault Alliance (NYSEMKT:AULT), you may have an interesting opportunity. The company is allowing qualified stockholders to trade in their common shares and receive Ault Alliance preferred shares in their place. In light of this development, AULT stock is firmly in the green today.
Ault Alliance is a diversified holding company. And when I say “diversified,” I’m not exaggerating. Ault Alliance’s business interests include cryptocurrency mining, a metaverse platform, aerospace/defense, oil exploration, consumer electronics, medical/biopharma and more.
On most days, AULT stock isn’t on Wall Street’s radar. However, today is different because the company announced a large-scale share buyback program.
Sometimes, share repurchase programs mainly target mega-sized shareholders. However, Ault Alliance’s buyback program allows shareholders of practically any size to participate. Reportedly, Ault Alliance’s investors can trade in blocks of 200 common stock shares (up to 333,333,333 shares in total). In return for each of those blocks, they’ll get three shares of preferred stock at an effective price of 15 cents per common stock share.
What’s Happening With AULT Stock?
After the share buyback program was announced, AULT stock jumped more than 20% before pulling back somewhat. As of this writing, shares are up more than 15% and trading between 10 cents and 11 cents.
Investors who believe in Ault Alliance’s future prospects as a business might be eager to take advantage of the share exchange offer. After all, it would make sense to trade common shares currently valued at around 11 cents apiece for preferred shares with an effective value of 15 cents per common share.
Another positive consideration is that, by implementing this share repurchase program, the company can reduce the pool of its outstanding common shares. This could have a positive impact on the Ault Alliance common share price.
Will Ault Alliance’s share exchange and buyback program turn out to be a brilliant strategy? Only time will tell, but today it’s evident that AULT stock investors are highly optimistic.
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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.
