Shares of Dingdong (Cayman) Limited (DDL) soared 5.10% in the pre-market trading session on Thursday. The surge came after the Chinese online grocery delivery company announced that its board has approved a share repurchase program of up to $20 million of its outstanding shares until March 2026.
Share buybacks are typically seen as a bullish signal by investors, as they reduce the number of shares outstanding and increase earnings per share. The company's move to return value to shareholders through this buyback program has boosted market sentiment, driving up the stock price in the pre-market session.
Dingdong's stock had been under pressure in recent months due to concerns over the company's profitability and intense competition in the online grocery delivery market in China. However, the buyback plan indicates the management's confidence in the company's long-term prospects and suggests that the stock may be undervalued at current levels.
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