At last check, Seanergy Maritime Holdings Corp. (SHIP) was trading at $1.14, up 4.59% in premarket trade. During Thursday’s session, SHIP stock gained 4.81% to close at $1.09. There were 8.59 million shares of SHIP stock traded on Thursday, which was higher than the daily average share volume of seven million during the past 50 days. Over the last year, SHIP stock has lost -18.66%, and in the past week it has gained 11.85%.

HIP stock has gained 15.72% over the past three months, while it has shed -23.24% over the past six months. Further, SHIP currently has a market capitalization of $179.88 million and 160.17 million shares are outstanding. Ship stock continued to rally even after hours following a share repurchase plan.

How will SHIP Stock purchase shares?

As a U.S. public company, Seanergy is the only pure-play owner of Capesize ships. A modern fleet of Capesize vessels provides SHIP with marine dry bulk transportation services. In total, SHIP’s operating fleet will eventually be comprised of 16 Capesize vessels with an average age of 11.4 years and a cargo carrying capacity of 2,829,631 dwt when fully-delivered and following the sale of M/V Leadership. SHIP is based in Glyfada, Greece, but incorporates in the Marshall Islands.

In an announcement, Seanergy announced the authorization of its Board of Directors to repurchase shares (the “Plan”). A share purchase plan for SHIP allows the company to repurchase shares up to $17 million. According to the SHIP’s market capitalization as of August 10, 2021, this represents approximately 10% of the firm’s market capitalization. By following Rule 10b-18, a portion of shares may be purchased at open market, or through a trading plan that is approved under Rule 10b5‐1 of the Securities Exchange Act of 1934.

The Plan provides that the SHIP may repurchase its shares at the discretion of management at prices deemed attractive and in the best interests of its shareholders and the company. SHIP’s purchase of stock is subject to various factors, including availability of stock, general market conditions, stock trading price, and alternative uses of capital, applicable securities laws, and SHIP’s financial performance.

The SHIP reserves the right to suspend, terminate, or modify the Plan at any time for any reason, including market conditions, investment opportunities, liquidity, and other factors deemed appropriate by the SHIP. Share repurchase amounts and timing can also be determined by these factors. The SHIP is not required to purchase any of its shares under the Plan. The Board of Directors hereby authorizes the Plan, which takes effect immediately and expires at the end of December 2022.

SHIP’s decision was driven by what?

SHIP’s share price and market value are believed by Seanergy (SHIP) to be significantly undervalued, not only as a result of its solid earning potential, but also as a result of its undervalued assets. Therefore, SHIP believes that share buybacks are the best and most appropriate capital allocation decision.