MeetMe Stock Gains On New Share Repurchase Authorization

Shares of MeetMe Inc. (NASDAQ:MEET) gained nearly 7% yesterday after the social network operator announced a new share repurchase program worth $15 million. The company will buy back shares either from the open market or through privately negotiated transactions in the next 12 months.

The company intends to use cash from operations to fund the new share repurchase program. As of Aug 31, 2016, MeetMe had approximately 54.4 million shares outstanding.

MeetMe strives to enhance shareholders wealth through various strategies that often include repurchasing shares. During fourth-quarter 2015, the company increased the share repurchase authorization to $3 million and set a target to complete the same within six months.

Geoff Cook, the Chief Executive Officer of MeetMe, stated that “With significant free cash flow being generated through our successful business model, we believe our stock is undervalued and the repurchase of our shares is an efficient use of our excess capital and will enhance shareholder value”.

MeetMe’s financial strength allows it to continue it’s the buyback program. As of Jun 30, 2016, the company’s cash and cash equivalents were $32.1 million. Its aggressive share repurchases policies are expected to boost investor confidence in the stock. Also, MeetMe’s strategy to return wealth to shareholders demonstrates its growth potential and stable liquidity position.

MEETME INC Price

MEETME INC Price | MEETME INC Quote

Formerly known as Quepasa Corporation, MeetMe is headquartered in New Hope, PA, and it owns and operates a social network. It allows users to meet new people through social games and apps, monetized by both advertising and virtual currency. The company operates MeetMe.com, Quepasa.com and MeetMe apps on both iPhone and Android platforms.

We believe that share buyback programs not only enhance shareholders’ return but also raise the market value of the stock. Through share repurchases, companies bolster investor confidence, persuading them to either buy or hold the scrip. MeetMe’s optimism on its growth potential raises hopes of increased shareholder value through dividend payouts and share buybacks.

Other companies that have a consistent track record of returning value through share repurchases and dividend payments include Apple Inc. (NASDAQ:AAPL) and Accenture plc (NYSE:ACN) .

Currently, MeetMe carries a Zacks Rank #2 (Buy). Another well-placed stock in the broader technology sector is Facebook Inc. (NASDAQ:FB) , which sports a Zacks Rank #1 (Strong Buy).

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