BCO315 – Corporate Finance (3CH/4ECTS) Task 2.2 CASE STUDY 1: GROVE INC. (GRVI) SHARES SOAR FOLLOWING SHARE REPURCHASE A

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BCO315 – Corporate Finance
(3CH/4ECTS)
Task 2.2
CASE STUDY 1: GROVE INC. (GRVI) SHARES
SOAR FOLLOWING SHARE REPURCHASE AUTHORIZATION
Grove Inc. (GRVI) stock has had a wobbly time since its IPO.
Once again GRVI shares are rising after the company announced a
share repurchase program for up to 1 million shares of its
outstanding common stock. The innovator in health and
wellness, Grove Inc. (GRVI), has been in the news lately. In the
last week, the company launched its wholly-owned
division to acquire promising Amazon and ecommerce businesses.
The subsidiary will run with the name Upexi. GRVI stock
skyrocket above $9 on October 14, 2021 following the Upexi news.
Now, the stock is once again approaching the $8 price mark with
the common stock repurchase news. Overall, Grove has
soared over 36% year-to-date and has jumped nearly 87% in this
quarter. At the moment, GRVI is trading around its resistance point
and the RSI confirms that, which is 70.46. The fundamentals
look good but the company is still relatively new on the stock
market. The IPO just occurred on June 23, 2021. The quarterly sales
have soared over 43% and the revenues increased by a whopping
250% in the fiscal year 2021 over 2020. The revenues totaled
around $24.1 million, showing strong progress.
As of June 30, 2021, the working capital increased to
$12,473,922 from a negative $869,760 in the same period last year.
Whereas, the net increase in the cash this year was $13,646,694
compared to a negative $2,809,915 in 2020. The company expects the
current fiscal year 2022 to outperform the fiscal year 2021. The
prospects are bright for the company as we conclude the
fundamentals of Grove.
The 1 million shares repurchase authorization shows GRVI’s
commitment to increasing shareholder value. That will also help the
firm in deploying some of the cash flow in the coming period. With
improvement in revenues, a strong balance sheet, and positive cash
flow, this might be the right time to authorize the option to
repurchase stock. Apart from that, Grove Inc. (GRVI) is also
expanding its business. The launch of Upexi is part of its
expansion plan. The company plans to take direct aim at the Amazon
Aggregation market. Through Upexi, the company would integrate the
e-commerce market as a desirable suitor to which prospective
business owners may sell. That will provide potential sellers
access to Grove’s programmatic ad technology, in-house digital
marketing experts, and direct partnership with a team of expert
Amazon PPC buyers.
Amazon is the biggest e-commerce marketplace and the pandemic
has really ignited the online marketplace. It is a great
opportunity for Grove Inc. (GRVI) to expand in the right market at
the right time.
This article is accessible
from: https://stockstelegraph.com/grvi-shares ... epurchase-
authorization/
REQUIRED:
You need to Provide your view on the above case study
identifying the factors that could have caused the
above impact to the company. The answer scheme should clearly
include an analysis of why a company would consider an IPO and
Share Repurchase Strategy.