The case of the vanishing buybackPretty interesting how management and the board promised the dividend, and after much delay, promised again. Then finally paid a paltry dividend. Then after much pressure they acquiesced the the activists and fed-up shareholders to do a buyback, after all peers had long ago started returning capital, and these guys were the last one, with the most undervalued paper. They announced the buyback far in advance, then gave press releases on it, and made sure it was really well telegraphed. Then they started buying, heavy at first, with weekly press releases. Lots and lots of fanfare, all the way up to $3.38 at the time of earnings. Then...poof! No more buybacks. No explanation. No notice even.
One would hope that buybacks would be done to make a sound investment in an undervalued company. And so it was and is. Or at least to return capital to shareholders, as they said they intended. But overall the effect was to get the share price up sharply, for a brief time, and give some shareholders an exit. One of these was the CFO, who sold 53,656 shares just after earnings, at just about the soonest time allowed.
Then the CEO tells us on the call all about why he's a shareholder and why he would buy more shares. Is he buying any more shares? Not that I can see. Of course, he gets lots of free stock every year. But never bought a single share in the open market that I can recall, since the very beginning. And he says our shares are such a good value at $3.38, where they were buying last on the issuer bid, but he can't bring himself to buy at $2.51, despite plenty of capacity left on the NCIB. Not for his own account, nor for the corporate treasury. They give us the song and dance about the board's strategic capital priorities. What priorities? To do placements in related entities where the CEO is drawing even more compensation? The buyback is the board's decision, it's true. Well, the CEO is on the board, as the founder of the company!
It's all quite insulting. A far cry from an owner operator, run by shareholders and for shareholders. More like just another Vancouver job. I've seen this movie a hundred times. Pity that they have really good assets, which could be put to good use for the benefit of the owners of the company.