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GUANGZHOU, China - Sound Group Inc. (NASDAQ: SOGP), an audio-centric social and entertainment company with a market capitalization of $6.5 million, announced today that its board of directors has authorized a new share repurchase program. The company is now permitted to buy back up to $4 million of its Class A ordinary shares, including those in the form of American depositary shares. According to InvestingPro data, the stock has declined nearly 42% over the past year.
The repurchase initiative is set to commence immediately and will be conducted through various methods such as open market transactions, privately negotiated deals, and block trades, subject to market conditions and in compliance with applicable regulatory requirements. The exact number of shares to be repurchased and the timing will be based on a range of factors, including market price, trading volume, and the company’s financial position. The company maintains a healthy current ratio of 1.62 and holds more cash than debt on its balance sheet, though InvestingPro analysis indicates the company has been quickly burning through its cash reserves.
CEO and Chairman Mr. Jinnan (Marco) Lai expressed the company’s commitment to creating sustainable value for stakeholders, emphasizing the repurchase program as a testament to their confidence in Sound Group’s growth trajectory and strategic initiatives. The repurchases are to be funded from Sound Group’s existing cash reserves or future operational cash flows.
Sound Group, which has been publicly traded on Nasdaq since January 2020, positions itself as a pioneer in the audio platform space, aiming to enhance human connections through sound. While the press release includes forward-looking statements regarding the company’s expectations and growth in the online audio market, these are subject to the usual risks and uncertainties inherent in such projections.
This share repurchase announcement is based on a press release statement from Sound Group Inc. and aligns with the company’s broader strategy to optimize capital allocation and shareholder returns. The company has not provided any guidance on the expected impact of the buyback on its share price or financial performance. InvestingPro analysis suggests the stock is currently undervalued, with 13 additional key insights available to subscribers, including detailed valuation metrics and growth forecasts.
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