The Salt Lake City, Utah-based ecommerce giant, Overstock.com, Inc. (NASDAQ:OSTK) has announced a $100 million stock repurchase program that the company said they hope will serve to, "...return value to Overstock stockholders and to help offset the dilutive impact of recent stock issuances and future employee restricted stock vesting."
How does a company buy back up to $100 million in stock? Well, it has to have the cash on hand and a lot of confidence in their business, which Overstock does. In Q1 financials for 2021, Overstock reported total net revenue at $660 million, an increase of 94% year over year, with cash and cash equivalents at $535 million. They're doing well.
So how does buyback work? I asked the internet, and found a handy video from the Wall Street Journal. Basically a buyback program raises earnings per share (EPS) and therefore raises prices for existing stockholders.
In a recent press release, Overstock CEO Jonathan Johnson said, “This share repurchase program is aligned with our commitment to strategically deploy capital where we believe we can drive the greatest value for our shareholders and underscores the strength of our balance sheet.”
Cheers to a strong balance sheet, and a new stock repurchase program to go with it.