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Highlights
- Exela Technologies (NASDAQ:XELA, XELA:US) is gaining traction among investors amid some recent developments.
- Stocks of Exela Technologies galloped by over 16 per cent on Wednesday, January 26, noting a daily trade volume of 268 million shares.
- The business process automation provider, on January 26, announced a buyback of up to 100 million common shares at US$ 1 apiece in exchange for new notes, i.e., unsecured six per cent senior notes up to US$ 100 million due in 2029.
Exela Technologies (NASDAQ:XELA, XELA:US) is gaining traction among investors amid some recent developments. Stocks of Exela Technologies surged by over 16 per cent on Wednesday, January 26, noting a daily trade volume of 268 million shares.
Exela Technologies provides business process automation solutions to improve information management, workflow automation and integrated communication. The Texas-headquartered company offers industry-specific, multi-departmental and multi-industry solutions.
Now, let us see why this small-cap tech firm is gaining traction.
Exela (NASDAQ:XELA, XELA:US) stock performance
Exela Technologies’ stock swelled by almost 61 per cent week-to-date following the announcement of the share buyback offer. The software stock closed at US$ 0.64 per share on Wednesday, roughly 86 per cent above its 52-week low of US$ 0.345 on January 24.
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What happened?
The business process automation provider, on January 26, announced to buyback up to 100 million common shares at US$ 1 apiece in exchange for new notes, i.e., unsecured six per cent senior notes up to US$ 100 million due in 2029. One thing to note here is that the new notes received in exchange for the freely tradable common stock will also be freely tradable. Likewise, these will be restricted to the same level as the tendered common stock.
On January 25, the small-cap technology firm renewed its service contract (worth over US$ 35 million) with a consultancy company.
Exela's financial performance in Q3 FY2021
The US$ 166 million market cap company saw its revenue slump by 8.5 per cent year-over-year (YoY) to US$ 279.2 million in the latest quarter, mainly due to COVID-led low volumes underutilization of resources and transition revenue exits. The company reported a net loss of US$ 13.2 million in Q3 FY2021 compared to US$ 28.3 million a year ago.
Bottom line
Exela Executive Chairman Par Chadha said that the company had deployed more than US$ 400 million capital to sufficiently decrease its debt and extend maturities. Following this, the company is now deploying capital to "unlock shareholders value" for its "large and growing” base.
Exela is focused on expanding its operational footprint across the globe. However, investors should watch financial numbers to evaluate the risk attached and its growth prospects before investing.
