Shares of BitGo Holdings Inc. (NYSE: BTGO) jumped 11.6% on Wednesday after the company disclosed that its board has authorized a share repurchase program capped at $50 million.
The company said the authorization equates to about 8% of its Class A shares outstanding at current market prices. The board enacted the program with immediate effect and did not attach a fixed termination date.
In a statement accompanying the announcement, BitGo's board described the buyback as an expression of its belief that the company's underlying value surpasses the current market valuation and framed the program as part of disciplined capital stewardship.
"This authorization reflects the Board’s confidence in our business and long-term trajectory," said Ed Reginelli, Chief Financial Officer of BitGo. "We believe that repurchasing our shares represents an attractive use of capital at this time while allowing us to continue investing aggressively in our platform and clients."
The company outlined that repurchases may be executed in a variety of ways - including open market purchases, privately negotiated transactions and block trades - subject to prevailing market conditions and applicable legal and regulatory requirements. BitGo noted that open market transactions are expected to be conducted in accordance with Rule 10b-18 under the Securities Exchange Act of 1934.
BitGo emphasized that decisions on the timing, method, price and total amount of repurchases will be made at the company's discretion. The firm also indicated it plans to use existing cash and cash equivalents to fund any buybacks and does not anticipate that repurchases will affect the capital positions of its regulated subsidiaries.
The board made clear that the program does not obligate BitGo to acquire any particular amount of common stock. Management may modify, suspend or terminate the program at any time without prior notice.
This announcement followed the stock's intraday move higher, reflecting investor reaction to the newly authorized repurchase. The details released by the company provide the framework for how purchases could be carried out while reiterating the board's view of the company's valuation relative to the market.
Further execution - including whether and when repurchases are made, and in what amounts - remains subject to market conditions, legal and regulatory constraints, and the company's discretion.