Pop Mart launches largest ever buyback after record stock plunge
The buyback helped stabilise sentiment on Friday, with shares rising as much as 4.1 per cent
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POP Mart International Group undertook its largest buyback ever in a move to bolster confidence after a record stock plunge spurred by concerns over its reliance on Labubu dolls for growth.
The toymaker bought back 3.94 million shares for HK$599.7 million (S$98.5 million) on Thursday, according to a Hong Kong stock exchange filing.
The purchase marks Pop Mart’s third buyback this year, after scooping up a total of HK$347 million worth of shares in January that helped fuel a nearly 50 per cent rally in the stock through mid-February.
The move comes after earnings results drove an unprecedented two-day drop of 31 per cent in the company’s Hong Kong-listed shares through Thursday that wiped out US$11 billion from its market capitalisation.
Analysts have since cut price targets and downgraded their outlooks, citing signs of slowing overseas momentum and growing dependence on the Labubu franchise.
The buyback helped stabilise sentiment on Friday, with shares rising as much as 4.1 per cent.
Still, bearish positioning on the stock remains high, with short interest at 16.8 per cent of free float, near the highest level since late 2022, according to S3 Partners data. BLOOMBERG
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