Shares of VivoPower International (NASDAQ:VVPR) have skyrocketed by a whopping 497% this week. The sustainable energy solutions provider has been in the limelight as its subsidiary, Tembo E-LV, is slated to merge with Cactus Acquisition (NASDAQ:CCTS), a special purpose acquisition company (SPAC).
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Additionally, the buzz around its dividends and share repurchases is keeping investor sentiment buoyant in the stock.
The SPAC Deal
The SPAC deal pegs a nearly $838 million equity value for Tembo and is largely expected to close later this year. Upon closing, the entity will change its name to Tembo Group and will be listed on the NASDAQ. Under the deal, shareholders in Vivo will receive 5 Tembo Group shares for each Vivo share held by them. A final business combination agreement and an independent fairness opinion are expected to be finalized by early next month.
Vivo Dividends
Furthermore, Vivo plans to issue a dividend on a pro-rata basis to its shareholders. This includes an amount equivalent to 10% of the aggregate merger consideration shares to investors of record on April 30. Additionally, investors who are registered on April 30 and still hold their Vivo shares as of June 30 stand to receive an amount equivalent to another 10% of the aggregate Tembo dividend shares.
However, the dividend shares will have a lockup period of six months post the listing of Tembo. In total, Vivo plans to distribute around 16.76 million shares.
Vivo Announces Share Buyback
Adding more excitement around the stock, Vivo has announced a share buyback worth up to $5 million today. The share repurchase program is valid for nearly a year. Vivo plans to fund the share repurchases with proceeds from business and asset divestments.
Is VivoPower a Good Investment?
Despite the recent price rally, VivoPower’s stock price still remains nearly 94% lower over the past three years. The stock is currently trading at a price-to-earnings multiple of -1.4.
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