Wix.com (WIX) Stock Jumps as Board Approves $2 Billion Share Buyback Through 2027

TLDR

• Wix.com (WIX) announced a $2 billion share buyback program covering fiscal years 2026 and 2027
• The program allows repurchase of ordinary shares and convertible notes
• Repurchases will begin after a 30-day period for creditor objections under Israeli regulations
• Funding will come from cash on hand, operational cash flow, or new capital through debt or equity
• WIX stock jumped 4.83% to $92.21 in pre-market trading following the announcement

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Wix.com announced on Wednesday that its board of directors has approved a two-year share buyback program worth up to $2 billion. The program covers fiscal years 2026 and 2027.

Wix.com Ltd., WIX

The technology company can use the authorization to repurchase ordinary shares or convertible notes. The board’s decision gives management flexibility in how they execute the buybacks.

The program won’t start immediately. Under Israeli regulations, the company must wait 30 days after the announcement. This period allows creditors to raise any objections to the buyback plan.

Wix.com outlined several funding sources for the repurchases. The company plans to use its existing cash reserves as one option. Future cash generated from regular business operations will also fund the program.

The company left the door open for raising additional capital. This could include issuing new debt securities. Wix.com also mentioned equity or equity-linked securities as potential funding sources.

The market responded positively to the news. Wix.com shares rose 4.83% in pre-market trading on the Nasdaq. The stock reached $92.21 before regular trading hours began.

Scale and Timeline

The $2 billion authorization represents a substantial commitment from Wix.com. The two-year timeframe gives the company room to execute the program strategically.

Share buyback programs typically signal management confidence in the company’s financial position. They also suggest leadership believes the stock is undervalued at current prices.

The authorization provides a maximum spending limit. Wix.com isn’t obligated to purchase the full $2 billion worth of securities. The actual amount repurchased will depend on market conditions and capital allocation priorities.

Funding Strategy

Wix.com’s multi-pronged funding approach offers operational flexibility. Using cash on hand avoids taking on new debt obligations. Funding through operational cash flow demonstrates the company’s ability to generate money from its core business.

The option to raise new capital through debt or equity issuance provides a backup plan. This approach ensures the buyback program won’t constrain other business needs. The company can balance returning cash to shareholders with investing in growth opportunities.

The program includes both ordinary shares and convertible notes. This dual approach gives Wix.com options in managing its capital structure. Repurchasing convertible notes could reduce future dilution risks.

The 30-day waiting period for creditor objections is a standard requirement under Israeli law. After this period expires, the company can begin executing repurchases according to its preferred timeline and strategy.

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