DigiPlus Interactive Corp., a Manila-based online gaming company, announced a substantial share repurchase program, as reported by the Manila Standard. This initiative aims to enhance shareholder value amidst recent market volatility.
The 12-month buyback program, entirely financed through internal funds, has a maximum budget of PHP6 billion (approximately $105.9 million). The board of directors retains the option to extend the program upon approval. This action follows a significant 55.8% drop in the company’s share price over the past two weeks, a decline attributed by DigiPlus to concerns regarding potential regulatory restrictions on online gaming.
Share prices plummeted to PHP29.50 last week, a sharp contrast to the 52-week high of PHP65.30. This dramatic decrease underscores the challenges facing the company.
This buyback strategy, according to DigiPlus, is a direct demonstration of the company’s confidence in its long-term prospects and its commitment to shareholder returns.
Boosting Shareholder Confidence
Chairman Eusebio Tanco emphasized the company’s unwavering belief in DigiPlus’s future growth and robust financial foundation. He stated that the strategic allocation of capital through the share repurchase program serves as a strong indication of DigiPlus’s dedication to providing sustainable returns for its shareholders while maintaining its capacity for expansion and innovation. The buyback is intended to counteract the negative impact of the recent price drop and signal confidence in the company’s future.
Expansion into Brazil
In other news, DigiPlus is actively pursuing international expansion, with plans to launch operations in Brazil in September. The company anticipates significant growth potential in this market, describing it as being double the size of the Philippine market. Preparations for this launch have been underway throughout the year, including the recent appointment of an operations manager to oversee the Brazilian operations. This strategic move represents a key component of DigiPlus’s broader growth strategy.
