Share repurchases are something microcaps often talk about, but almost never seem to do. That's not knocking upstarts; they intentions are good, but the capital is generally not there to spend on things like buybacks when it is needed for development. Monday morning, a couple companies are getting a lift in share value following news of cleaning up their structure.
Mobile game and app developer Tapinator (OTCQB:TAPM) wiped out a bunch of preferred stock, while Universal Power Industry Corp. (OTCPK:UPIN) took care of some common stock.
Tapinator repurchased 1,354 shares of its Series B Convertible Preferred Stock, representing all of the company's class of the stock, for a per share purchase price of $270.83, or an aggregate purchase price of $366,708.32. The terms of the Series B stock meant it could have been converted into 11.3 million shares of common stock. With the buyback, Tapinator no longer has any Preferred Stock in any class.
The latest move to build shareholder value follows the New York-based company eliminating all of its debt earlier this year.
"This transaction was opportunistic in that we were able to purchase this stock at a value below market and at a level that we believe to be well below fair value for the company when comparing the company's enterprise value (EV), historical revenues and adjusted EBITDA (a non-GAAP measure) to those of comparable publicly traded mobile gaming companies," said Tapinator president Andrew Merkatz in today's news release.
Universal Power said it has agreed to purchase two million shares of common stock, currently in certificate form, from its largest shareholder.
The investor remained anonymous, as did the terms of the buyback.
Saying that the company is considering additional repurchases, Universal Power vice president Tony Chiu said, "The company eagerly wanted those shares as it represented almost half of their outstanding free trading shares in the company. We strive to build shareholder value every way we can."
Shares of TAPM are surging 60% to 6.9 cents in Monday trading as of 1:20 PM EDT, while shares of UPIN are up 13.3% at 10.2 cents and near a 52-week high.
