Total cash and cash equivalents as of December 31, 2016 were $612.7 million, compared with $573.6 million as of September 30, 2016. We held $572.7 million of cash and cash equivalents in accounts of the Company’s subsidiaries outside of the United States.
That’s 93% of the cash overseas. A tax holiday as proposed by some in government would allow them to repatriate that cash at a reduced or no tax. The government occasionally will allow companies such a “one-time” tax holiday. I think the last one was in 2004 at a 5.25% rate which is much lower than the 35% corporate tax rate. I think it’s likely that Trump and the Republican controlled Congress will enact such a holiday which will help UBNT. Other companies such as AAPL and MSFT also have huge amounts of cash overseas.
Chris
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Glad to have you back on the board Chris!
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Glad to have you back on the board Chris!
Indeed!
Matt
Total cash and cash equivalents as of December 31, 2016 were $612.7 million, compared with $573.6 million as of September 30, 2016. We held $572.7 million of cash and cash equivalents in accounts of the Company’s subsidiaries outside of the United States.
That’s 93% of the cash overseas. A tax holiday as proposed by some in government would allow them to repatriate that cash at a reduced or no tax. The government occasionally will allow companies such a “one-time” tax holiday. I think the last one was in 2004 at a 5.25% rate which is much lower than the 35% corporate tax rate. I think it’s likely that Trump and the Republican controlled Congress will enact such a holiday which will help UBNT. Other companies such as AAPL and MSFT also have huge amounts of cash overseas.
I wrote this a about a year ago. Now it’s here. Can we expect a BIG share repurchase from UBNT? Market cap is 5.8B so there about 77M shares. A $300M share buyback is 4M shares at today’s price. That represents about 5.2% of the shares, but more than 10% of the shares that Pera doesn’t own. I think we will see more upward pressure on the share price assuming UBNT institutes another big share repurchase program…
Chris
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Good point, Chris.
And as of last quarter the company had a total of $631M in cash. $597M was held overseas.
If they bring it all back, they will pay about $90M in taxes and take a one time hit.
The company doesn’t really need all of the cash they have on hand. I do not see them buying a company that is established with a sales force that would be a completely different model. Maybe a small start up with some good tech would be a target, but that seems unlikely as well.
So, yes. Repatriation seems like a great idea to me and hope it has the effect on the stock price you suggest.
A.J.
A $300M share buyback is 4M shares at today’s price.
As of last quarter the company has $600M cash, $285 in debt. I assume the cash is used as collateral for the debt. Also, the company needs about $50 to $100M for operations (this is in addition to the current AR). You still have to pay some tax on the money brought back.
So I would not assume anything more than $150 to $200M available for buyback.
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