AlphaNinja - Saba Software (SABA), a performance measurement software and services firm, decided that a (nearly) 52week high was the right time to buy its own shares from investors that didn't want them anymore:
REDWOOD SHORES, Calif.--(BUSINESS WIRE)--Saba Software, Inc. (NASDAQ:SABA - News), the premier people management software and services provider, today announced that it has repurchased approximately 4.7% of its outstanding shares of common stock. The 1,384,920 shares of common stock were repurchased by Saba directly from funds managed by FirstMark Capital L.L.C. in a negotiated transaction for an aggregate purchase price of $4.85 million. The repurchased shares have been retired and will resume the status of authorized but unissued shares of common stock.
"Our recent share repurchase reflects continued confidence in Saba`s strategy and ability to execute as well as an ongoing commitment to increase stockholder value," said Bobby Yazdani, Chairman and CEO of Saba. "We believe that the current market value of our shares does not accurately reflect the underlying value of the company and that stock repurchased at this price will benefit stockholders."
In fairness to Saba, yes, the market does not give the company much "valuation" credit. Net of its big cash holdings, the company trades at a Price-to-Sales under 1, a cheap number for a software outfit. The company announced earlier this year that it would partner with IBM, a potentially big development that sent shares from $1 to the current $3.50. Selling shareholders at FirstMark Capital probably figure this is a nice time to exit. What's EXTRA nice for them is the sweet deal of unloading their entire stake directly to the company, instead of selling on the open market -->> the amount they sold is equal to over 8days of total trading volume in this stock, meaning it likely would've taken a long time to bleed shares to the market in order to avoid depressing the price.