CINCINNATI - Mobile Infrastructure Corporation (NYSE American: BEEP), a company specializing in parking assets, has announced strategic financial maneuvers aimed at enhancing shareholder value. Mobile has obtained a $40.4 million line of credit from Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners Master, Ltd. This funding is intended for several key purposes, including the flexibility to pay for future preferred stock redemptions in cash, covering all accrued dividends on preferred stock, and initiating a common stock repurchase plan.
In a move to address the perceived undervaluation of its stock, Mobile Infrastructure's Board of Directors has authorized a $10 million share buyback program. The repurchases will be executed as market conditions allow, through open market or privately negotiated transactions.
Jeff Osher, Co-Chairman of the Board of Directors, emphasized the company's commitment to increasing shareholder value and expressed confidence that the new credit facility will prevent future dilution from preferred stock conversions. Stephanie Hogue, President of Mobile, noted that the funding would resolve the issue of dilutive preferred equity conversions to common stock, which has significantly impacted the company's valuation over the past year.
The line of credit will bear an interest rate of 15.0% per annum, with interest payable at maturity or upon any principal repayment. Notably, Jeff Osher is also the managing member of No Street Capital LLC, which manages the lenders providing the credit facility.
This announcement comes as Mobile Infrastructure continues to explore strategies to bridge the gap between its net asset value, reported at $7.25 per share, and its current share price. The information is based on a press release statement from Mobile Infrastructure Corporation.
InvestingPro Insights
As Mobile Infrastructure Corporation (NYSE American: BEEP) takes decisive steps to enhance shareholder value, it's important to consider the company's financial health and market performance. According to InvestingPro data, Mobile Infrastructure has a market capitalization of approximately $106.05 million, indicating its size relative to other companies in the industry. Despite the challenges, the company has managed an impressive gross profit margin of 65.72% over the last twelve months as of Q2 2024, showcasing its ability to maintain profitability on its core operations.
InvestingPro Tips highlight that Mobile Infrastructure's short-term obligations exceed its liquid assets, suggesting potential liquidity risks that may need to be managed carefully, especially in the context of the new line of credit and share repurchase plan. Furthermore, the company has not been profitable over the last twelve months, which is reflected in its negative P/E ratio of -2.39. This could be a concern for investors looking for immediate profitability, but the company's strong return over the last month, with a 33.08% price total return, may indicate a positive market reaction to its recent strategic initiatives.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available for Mobile Infrastructure Corporation, which can be accessed at https://www.investing.com/pro/BEEP. These tips provide valuable insights that can help investors make more informed decisions regarding their investments in the company.
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