Why Voyager Stock Climbed 10% on Thursday

Voyager (TSX:VOYG) stock saw movement today after the CEO announced that the company cancelled its automatic securities disposition plan, sending shares up 10%.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 20, 2022 4:45 pm EST

Voyager Digital (TSX:VOYG) regained some of its losses from the past few weeks after management announced it would cancel its Automatic Securities Disposition (ASD) plan. Voyager stock climbed 10% after the news.

What happened?

Management announced Voyager stock would no longer go through with the ASD plan, announced on Dec. 31. The plan aimed to allow trades for Chief Executive Officer and Director Stephen Ehrlich and Chief Operating Officer Gerard Hanshe to sell common shares. Elhrlich was allowed up to 1,000,000 under the plan, and Hanshe was allowed up to 142,000.

If sold, the shares would be on an automatic basis, not dependent on the share price, as the name suggests. The news sent Voyager stock down about 17% between trading days.

The CEO and COO did not sell any shares under the plan before the cancellation was announced.

So what?

Ehrlich stated the reasoning behind the cancellation is simple: they want the best for their shareholders. He further elaborated on this point within the statement.

“Despite having a floor significantly above the current stock price, I felt it was in the best interest of the investors to withdraw the plan.” Ehrlich said. “Based on our key financial metrics, including revenues for the quarter ended December 31, 2021 as disclosed in our press release issued January 5, 2022, I believe Voyager is undervalued and am excited about our product growth and expanded capabilities planned for 2022, including our NFT offering, debit card rollout, international expansion and more.”

Now what?

Analysts tend to agree with Voyager stock on this point, continuing to weigh in on the future of the company. Most analysts believe the stock will outperform the market, with many giving it a target price around $30 per share. That would see the stock more than double.

It’s a smart move that clearly brought investors back on board with Voyager stock. And could be the catalyst to get it moving again. Cryptocurrency companies continue to see drops in share price, so growth from platforms like this is definitely positive news.