Golden Matrix Group (NASDAQ: GMGI), a developer of online gaming platforms, announced Friday that it is restarting a previously announced share repurchase program.
The news comes as the stock has declined by 20.63% over the past month, suggesting that management sees value in the stock following a period of weakness.
The company has approximately $4.958 million available under the current program and currently has 129,242,993 shares of common stock outstanding, according to a statement issued by the Las Vegas-based firm.
Shares of Golden Matrix currently trade at around $2, meaning that if the company repurchased $4.95 million worth of its stock today, it would reduce its shares outstanding tally by nearly 2.5 million. The licensor of online gaming platforms said the buyback will be performed from time to time on the open market, and the board of directors has the discretion to modify or suspend the plan. Eighty-five percent of the shares are held by company insiders.
A Strong Balance Sheet
With a market capitalization of $255.23 million, Golden Matrix is a small-cap stock, indicating that some market participants may be overlooking the name. However, it possesses several strengths.
These include an impressive balance sheet featuring $38.4 million in cash, more than double the corporation’s $17.5 million in long-term debt.
> “We believe we are well-positioned to settle any debt as needed, and we are currently servicing all debt in cash, instead of equity. We also expect our liquid cash position to allow the Company to pursue accretive acquisitions, and continue to support our growth strategy,” said CEO Brian Goodman in the press release.
Goodman added that Golden Matrix’s various operating units are currently performing “at or above expectations” and that the company is likely to show strong growth in the current quarter. Through its business-to-business arm, Golden Matrix develops and licenses proprietary gaming platforms while its Meridianbet unit provides consumer-facing sports wagering services in 18 jurisdictions around the world.
Golden Matrix Expansion Plans
The resumption of the share buyback arrives at a time when Golden Matrix is exploring various global growth opportunities. Earlier this month, the company informed investors that it is pursuing licenses in Brazil and Ontario, Canada.
> “The Brazilian license will certainly be a game-changer for the company, offering a transformative opportunity to establish a strong foothold in one of the world’s fastest-growing gaming markets,” noted Goodman.
Third-quarter profit and sales surged 85% and 39%, respectively, and the firm has taken steps to enhance its liquidity profile.
