Ambitious fintech company Sezzle (SEZL +10.37%) was a sizzling-hot item on the stock market Tuesday. The spark that lit the fire was the company's announcement that it was doubling down on its share repurchasing activity; cheered by this news, investors bid up Sezzle stock by more than 10% that trading session.
Back to buybacks
Just after market close Monday, Sezzle announced that its board of directors authorized the company to repurchase up to $100 million worth of its common stock. That doubles down on a $50 million program that was announced in March.
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Sezzle is rapidly scaling up with the buybacks. Prior to authorizing that $50 million, the company's board had approved a $15 million initiative, and prior to that, one totaling $5 million.
In its press release trumpeting the new program Sezzle quoted its CEO Charlie Youakim as saying it "reflects our strong financial position and long-term conviction in the business."
He also said that it " reinforces our disciplined approach to capital allocation, particularly in a market environment that we believe presents an attractive opportunity to enhance shareholder value."
The company noted that under these authorizations, it has scooped up 2.9 million shares at an average price of $24.03 apiece.
NASDAQ: SEZL
Key Data Points
Keep your eye on the ball
While it's always heartening to see that a company has the financial strength to authorize steadily increasing buybacks (although this one started at a fairly low level), I wouldn't buy any stock purely on its share repurchase program.
Fundamentals matter more, and no company's buybacks are attractive if the numbers aren't looking good. They should always be at the forefront when considering an investment in Sezzle.
