LivePerson Targets Share Buyback After Tumble: Israel Overnight
LivePerson Inc. (LPSN), the Israeli software company that sank to a nine-month low last week, plans to buy back shares on expectations small-business customers will drive growth, Chief Financial Officer Daniel Murphy said.
“We think there’s an opportunity to purchase some of the shares as we’re very confident in the direction that we’re going,” Murphy said by phone yesterday from New York. “We’re excited about small business users. We have the ability to engage customers at the right time, whether on mobile, social or on the site.”
LivePerson, a maker of software that allows businesses to track customers surfing their websites, surged the most in a month yesterday, adding 3.7 percent to $12.75. Shares had fallen 18 percent through Dec. 6 after the company forecast on Nov. 6 fourth-quarter profit that trailed estimates. The Bloomberg Israel-US Equity Index (ISRA25BN) of the largest New-York traded Israeli companies rose 0.2 percent to 87.63. Chipmaker Tower Semiconductor Ltd. (TSEM) rallied after Texas Instruments Inc. (TXN)’s forecast met estimates.
LivePerson said it plans to spend as much as $20 million to purchase 2 percent to 3 percent of its outstanding shares. The software developer, based in New York with some operations in Tel Aviv, will probably post revenue growth of 18 percent this year, according to the mean estimate of 10 analysts surveyed by Bloomberg, the slowest pace since 2009.
LivePerson shares traded in Tel Aviv slipped 0.1 percent to 48.65 shekels, or the equivalent of $12.80, at 9:56 a.m. Israel’s TA-25 Index (TA-25) was little changed at 1,244.78.
LivePerson topped more than 1,000 small-business customers in the third quarter, it said on Nov. 6, and had $103 million in cash in its balance sheet at the end of September.
“We’re comfortable with $100 million on the balance sheet,” Murphy said. “We’re still a relatively small company, and think it’s not the worst thing in this economy to have a good amount of cash on your books.”
Shares fell on Nov. 7 after the company forecast fourth- quarter profit that trailed expectations and Chief Executive Officer Robert Locascio told investors in a conference call that “delivery of recognized revenue was slower than anticipated.”
“That was not a problem, however, with product demand but rather an execution problem that can be fixed,” Richard Fetyko, a New York-based analyst at Janney Montgomery Scott LLC who has a buy rating on LivePerson, said by phone yesterday. “The buyback is meaningful, and it’s also an indication of the management’s confidence that their shares are undervalued.”
Israel, which has a population of similar size to Switzerland’s, has 54 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.
Tower, the Migdal Haemek, Israel-based maker of customized chips, gained 2.6 percent to $9.03. The Tel Aviv shares today added 1 percent to 34.83 shekels, or $9.16.
Dallas-based Texas Instruments, the largest maker of analog chips, gave an updated fourth-quarter sales forecast yesterday that was in line with analysts’ estimates.
“If TI’s numbers are a harbinger of a recovery in the semiconductor sector, that could benefit a foundry company like Tower,” Jay Srivatsa, the managing director of equity research at Chardan Capital Markets LLC who has a buy rating on Tower, said in a phone interview yesterday from San Francisco.
Teva Pharmaceutical Industries Ltd. (TEVA) dropped 2 percent to $41.67 as Chief Executive Officer Jeremy Levin told investors in New York that the world’s largest maker of generic drugs will focus on drug-development efforts as the company seeks to replace medicines set to lose patent protection in the next three years. Shares of Petach Tikva, Israel-based Teva traded in Tel Aviv this morning lost 2.4 percent to 159.2 shekels, or $41.88.
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