"Destruction of Value": What Stands Behind Wix's Unfortunate Move
In a questionable move, about a month ago Wix bought back 31% of its shares from investors at an inflated price of $92 per share, for $1.6 billion. Today, after its first-quarter results were revealed,…
Assessment
Wix's decision to repurchase 31% of its shares at $92 each now looks like a costly miscalculation. The stock has since fallen to $55, meaning the $1.6 billion spent is worth under $1 billion today. The gap between the buyback price and the current market value raises questions about the company's capital allocation judgment and timing.