Mar. 17 at 6:36 AM
$GAMB @Kerbal @TolucaBlake That's fair, that might take 3 years. I would like to benefit from this depressed market cap sooner. They have 13 months to get the share price above fair value if they want to exercise the option to pay the 70% (28M) of the last 40m earn out in shares.
Assume for example they use 28m to repurchase shares this year. If those repurchases average
$4.50 a share then 17.5% of total outstanding shares are retired. If the SEO business picks up next quarter and we end 2026 with double the market cap 280m and 2.5x share price ~
$9.65. They can then issue 3M shares to cover 28M of the earn out. Lot of ifs there but debt would be reduced and you have retired 10% of outstanding shares.
Improving the share price by repurchasing shares bellow fair value also allows for flexibility in debt reduction. If the business isn't in dire straights I think it may be more prudent to make hay while the stock price is haywire.
