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Hexindai Skyrockets 40% After Announcing $25 Million Share Repurchase Program

According to the announcement, the purchases would be funded from cash on hand or future cash provided by operating activities, and the exact number of shares to be repurchased could be changed over time.

Shirley Tian
    Dec 10, 2018 12:16 PM  PT
Hexindai Skyrockets 40% After Announcing $25 Million Share Repurchase Program

Hexindai Inc. (Nasdaq: HX) shares surged more than 40 percent on Monday after the company said it might repurchase up to $25 million of its ordinary shares in the form of American depositary shares over the next 12 months.

According to the announcement, the purchases would be funded from cash on hand or future cash provided by operating activities, and the exact number of shares to be repurchased could be changed over time. 

As of Sept. 30, the lending platform had $53.1 million in cash and cash equivalents, it said in its latest earnings report. 

The stock of Hexindai has suffered huge losses after the company reported disappointing revenue for the three months through September. Shares of Hexindai plummeted from $7.50 per share in early Nov. to $1.89 per share last week. It rebounded back to $2.27 in mid-afternoon trading today in New York.

The Beijing company said last week that it facilitated loans for 2,183 borrowers, 90 percent less than a year ago. Loan volume during the second quarter of the fiscal year 2019 reached $33.8 million, a disappointing 87 percent decrease year-over-year. As a result, Hexindai's revenue was $3.6 million compared with $21.2 million last year. Net loss was $17.4 million in contrast to income of $12.7 million a year ago. Per share loss was 30 cents, the company said.

In response to the disappointing earnings, Hexindai's chief executive officer, Xinming Zhou said he believed it was because of Beijing's recent regulatory crackdown in the financing market, but he was optimisitc about the future. 

"The industry is gradually weeding out firms who are financially weaker, fraudulent or unable to maintain compliance standards leaving only the best run remaining," he said.

Zhou said the company focused on protecting the existing investors on its platform, reduced new loan offerings, and placed a priority on loan transfer products.

"While our top line decreased significantly as a result, these steps helped strengthen confidence in our platform and the loyalty of existing investors," Zhou added.


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