Dallas, Texas 02/03/2014 (FINANCIALSTRENDS) – On 31st January, STR Holdings, Inc. (NYSE:STRI) announced that it is launching a “modified Dutch auction” program with the intention of repurchasing shares of its common stock by using accumulated funds of close to $30 million. As part of the announcement, the repurchase price under this arrangement has been pegged at a high price cut off $1.54 and low price point of $1 per share. At the time of this announcement on 30th January, the shares of this company were being traded at $1.47 per share.
As per the terms of the “modified Dutch auction” interested share holders of the stock of STR Holdings, Inc. (NYSE:STRI) have to write in to the company, indicating the price at which they are willing to trade in their shares for cash. The choice they make should be within the specified price range of $1.54 and $1 announced by the firm. On expiration of the cut off, the firm will calculate the actual price at which they will buy out the stock, based on the numbers of stocks tendered and the price being quoted. Irrespective of the individual quotes, all share holders who have written in will be eligible to sell/ tender their shares at the price point the company decides on.
The funding for this stock repurchase program is to be arranged from cash at hand and will be open even for the directors and executive management team who wish to exercise this option. It has recorded revenue of $42.1 million over the trailing 12 months and had recently seen its revenue dip by a huge 73 percent when compared on a quarter on quarter basis. It has accumulated net loss of $138 million and has a market cap of $62 million. Due to its sagging profit margin ( 95% down on QoQ compare) and weak return on equity (93% down on TTM) the directors were forced to intervene to support the stock.