UBNT stock repurchase

Within the hour I received an email notice of 8-k in which Ubiquiti announced the “new” stock repurchase program: $100 million, plan to expire September 30. This in addition to $$27,628,253.91 remaining on earlier “September” repurchase program (also expires 9/30).

KC

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!!! Up 6.69% pre-market. I guess Pera is doing a Teddy, speaking softly and carrying the big stick.

KC

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This in addition to $$27,628,253.91 remaining on earlier “September” repurchase program (also expires 9/30).

To be clear the additional $100M expires on Sept. 30, 2018, not in 2 weeks.

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Yep, expires 9/30/2018, but I won’t be surprised if a substantial portion of the now remaining $120M for repurchases ends up being expended within the next month or so, prior to the next earnings announcement.

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UBNT intends to repurchase shares. I began repurchasing shares, too. My position was once significantly larger, but I’ve begun repurchasing shares at a significant discount. Here’s why:

  1. I’ve considered Citron’s allegations carefully and I don’t find them all that compelling. Some are troubling (namely, staff turnover and general staff weakness), but all companies have their issues.

  2. UBNT’s SEC filing offered reassurance:

The BOD approved an additional $100 million stock repurchase program.

UBNT updated its previously issued guidance for the quarter ending September 30, 2017. The Company expects its revenues to range between $240 million and $250 million. This is a significant increase from previously issued guidance.

Robert Pera will host an Investor Update on September 26, 2017. This could change investor perceptions regarding Citron’s claims. Pera will update 2018 guidance of between $1.0 billion and $1.15 billion in revenue and diluted earnings per share of between $3.70 and $4.30.

Although questions remain, these are positive developments. Between now and September 26, I’ll be looking for additional purchase opportunities.

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A stock repurchase plan doesn’t actually commit the company to do anything, as I’m sure you already know.

UBNT is down over 20% in a month. If it’s such a bargain, and the Citron report is unwarranted and they have so much free cash, why aren’t they buying now?

Honest question. They have $600m+ in cash/equivalents, and generated $50m+ in excess cash flow L12m [end June 30th].

One might think if they could buy $100m value of stock at $79m market price, they’d be doing it.

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UBNT is down over 20% in a month. If it’s such a bargain, and the Citron report is unwarranted and they have so much free cash, why aren’t they buying now? - NajdorfSicilian

It appears that you might not have been following the company that closely over the years. I credit Pera with conducting a reasonable and sustained program to repurchase shares for several years running. Here are a few links:

http://tinyurl.com/y7aq9nnd

(from 2015) Ubiquiti Networks: Continued Aggressive Share Buyback Confirms Anticipated Growth

https://seekingalpha.com/article/4056227-ubiquiti-buying-bac…

(March 2017) Ubiquiti recently announced it’d repurchased $50M in stock this quarter, and authorized $50M more. This represents 4% to 8% of the 25M share float.

…the company has been regularly buying back its shares since August 2012 (less than a year after its IPO).

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A stock repurchase plan doesn’t actually commit the company to do anything, as I’m sure you already know.

UBNT is down over 20% in a month. If it’s such a bargain, and the Citron report is unwarranted and they have so much free cash, why aren’t they buying now?

Honest question. They have $600m+ in cash/equivalents, and generated $50m+ in excess cash flow L12m [end June 30th].

One might think if they could buy $100m value of stock at $79m market price, they’d be doing it.

From the SEC filing (linked below), it states that the previous increase of $50M for share repurchases was approved on September 9th, 2017 (10 days ago by my calendar). Of that, only a bit more than $27M remained, so they have spent at least $22M buying back shares within the past 10 days (9 actually, since those numbers were through yesterday).

https://www.sec.gov/Archives/edgar/data/1511737/000165495417…

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A stock repurchase plan doesn’t actually commit the company to do anything, as I’m sure you already know.

The company buys back shares. That’s the only answer pretty much Robert Pera CEO gave to CNBC Scott on the twitter.

He also responded to an investor question on where they are with existing program, for which he answered, we are buying and the details are available on today’s 8K. The 100 million is the new program.

The bulk of the cash you are seeing on the balance sheet is outside the country and hence sort of not available to buyback. Any US cash is put to work on buybacks. The company over the years have consistently purchased a significant number of shares.

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Of that, only a bit more than $27M remained, so they have spent at least $22M buying back shares within the past 10 days (9 actually, since those numbers were through yesterday).

Good stuff, thanks.

Good stuff, thanks.

Gotta love actual numbers from a form submitted to the SEC…quite a bit more of a pedigree than the Citron website, if you ask me.