OpenTable’s (NASDAQ:OPEN) shares saw a surge in price over trading on Wednesday rising 9% from the 52-week low of $31.54 it closed at on Tuesday. While the prevailing optimism in the market following the collaboration between the Federal Reserve, the European Central Bank and the central banks of Canada, England, Japan and Switzerland do have a hand to play in this jump, the company’s announcement of a share repurchase program is what we believe really drove the move higher.  OpenTable made public its plans to buyback its shares up to $50 million in value soon after the move was cleared by its board. As share repurchases by a company are, more often than not, an indicator that the company views its shares as undervalued in the market, OpenTable saw investors getting bullish about its stock.
We currently have a $65 price estimate for OpenTable; nearly double what its shares command in the market today. We attribute this huge difference to the extremely pessimistic sentiment prevailing in markets across the globe owing to the deteriorating economic conditions and the feared aggravation of the slowdown.
OpenTable currently has 23.75 million common shares outstanding in the market priced at just above $35 each.Notes:
- OpenTable Announces $50 Million Share Repurchase Program, OpenTable Press Releases, Nov 30 2011 [↩]