LONDON - Gorilla Technology Group Inc. (NASDAQ: GRRR) has initiated a share repurchase program, buying back 1.1 million shares within the next five business days, as part of a strategy to address what it perceives as a significant undervaluation of its stock. The move follows a sharp decline in the company's market capitalization, which dropped from around $650 million to $35 million, despite what the company describes as strong business performance.
The Board of Directors of Gorilla, a provider of Security Intelligence and other technology solutions, has authorized up to $6 million for the share buyback. This decision reflects the company’s belief in its intrinsic value and its commitment to realign the stock price with its assessment of that value.
The company, headquartered in London, U.K., specializes in AI and Deep Learning Technologies, offering solutions across various sectors including government, manufacturing, and healthcare. Gorilla's CEO, Jay Chandan, expressed confidence in the company's financial position, which reportedly includes over $40 million in free cash reserves and total current assets exceeding $58 million. He also highlighted the company's real estate holdings, valued at over $25 million.
Chandan pointed to the fulfillment of payment obligations by the company's largest customers as a significant boost to the cash reserves, supporting the strategic buyback program. The company anticipates that this consolidation of shares will maximize shareholder value over the long term.
Gorilla Technology expects to release its unaudited financial statements for the first half of 2024 by September 30, 2024. The company's future plans and financial outlook contain forward-looking statements that involve risks and uncertainties, and actual results may differ from those projected. These statements are based on current expectations and are subject to change.
This news is based on a press release statement from Gorilla Technology Group Inc. and has not been independently verified. The company's shares are traded on the NASDAQ stock exchange under the ticker GRRR.
In other recent news, Gorilla Technology Group Inc. has experienced significant developments. The company announced the appointment of Bruce Bower as Interim Chief Financial Officer, a role in which he will oversee financial operations and aid in the company's expansion strategy. The company also announced the addition of former Bank of America (NYSE:BAC) executive Keith Levy to its Board of Directors, a move that will bring extensive financial and leadership expertise to the firm.
Gorilla Technology has also seen success in securing two major projects in Taiwan, one involving the expansion of the AI Airside Management System at the Taoyuan International Airport, and another partnering with a major telecom company to enhance Taiwan's national law enforcement agency's core network investigation systems. These wins highlight the company's commitment to innovation and delivering solutions that meet critical client needs.
In strategic partnership news, Gorilla Technology has collaborated with SINTRONES Technology Corp to enhance autonomous driving and fleet management systems. This partnership is set to leverage 5G networks and integrate SINTRONES's technologies with Gorilla's smart city and intelligent video analytics platforms.
In financial news, Gorilla Technology reported a significant year of growth in 2023, with revenues soaring to $64.7 million, marking a 189% increase year-over-year, and a net profit of $19.9 million. Additionally, the company announced a registered direct offering expected to raise approximately $12 million, funds that will be directed towards meeting the company's working capital needs. These are among the recent developments for Gorilla Technology.
InvestingPro Insights
In light of Gorilla Technology Group Inc.'s (NASDAQ: GRRR) recent initiation of a share repurchase program, InvestingPro data reveals a company with a market capitalization of $35.11 million, which is a stark contrast to its previous valuation of $650 million. Despite the significant drop, Gorilla Technology's aggressive repurchase strategy is underpinned by some strong business performance metrics. The company's revenue has seen a remarkable growth of 188.7% over the last twelve months as of Q1 2023, and its gross profit margin stands at an impressive 69.12%, indicating efficient management and a potentially undervalued stock.
However, one of the InvestingPro Tips suggests caution, as Gorilla Technology is quickly burning through cash, which could be a concern for investors considering the company's future sustainability. Additionally, the company's valuation implies a poor free cash flow yield, which is another red flag for long-term profitability. With analysts not anticipating profitability this year, the share buyback program could be seen as an attempt to stabilize the stock price and improve shareholder sentiment.
For investors looking to delve deeper into Gorilla Technology's financials and stock performance, there are additional InvestingPro Tips available at https://www.investing.com/pro/GRRR. These tips may provide further insight into the company's financial health and market position, offering a comprehensive picture for those considering an investment in Gorilla Technology.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.