Baytex Energy Corp T.BTE

Wild, question on NCIB

[BayStreetWolfTO]

Hi Wild, regarding your question...

A split up or down doesn't change your equity % as a shareholder

100 shares worth $10 or 10 shares with $100...your % of the company hasn't actually changed

Whereas an NCIB changes your equity %

To simplify say we have a company XYZ worth $10 billion and generates $1b FCF and you, JD, red, td and I all hold 1 share...and there are 5 shares outstanding. You would say we each hold a share worth $2 billion in equity and $200m of FCF per shareholder.

Now say we all got together and took company money to buy Red's shares....we take $2 billion out of the company money pay Red...now you, me, JD and TD hold 1 share each and there are 4 shares outstanding.

Our equity value is now $2.5b each and we have now $250m of FCF each and it was increased through company funds versus you having to buy additional shares to grow your equity

For instance if WCP bought back all shares except 2..
.1 for Grant and 1 you never sold...you would own 50% of WCP and at that point you could take 50% of the FCF in the form of a dividend between you and him....but you could imagine the share price if you only had 4 WCP shares left.

That is why I say buybacks first increase my ownership of the FCF....and I will take the equity gains (tax implications are different)

Hope that helps a bit.

[ManitobaCanuck]

Hi BSWolf    I get that , but the question is about reducing sharecount to reduce fluctuations/penny flippers .The net amount returned to shareholders does not reduce or increase in reverse split, just number of shares bought becomes less as vlaue increases .

[topdown99]

There is one other point that I haven't seen anyone mention , a large share count allows easy access (ie: buy and sell) . It makes for a lot of liquidity which is always a big draw for the larger players . It's one thing Nuttall et al will always speak about , the ability to get in and out easily . Small floats are generally held by a small base and with restricted shares available there

[BayStreetWolfTO]

MC, my opinion as a long-term holder is that doesn't help me. Maybe it reduces the volatility....but to be honest since I don't trade it the volatility doesn't matter to me...in fact it's fun and exciting to watch....don't make this boring like my banks lol I am focused on my timeline which is quite a ways out. What happens this week, next week, next month makes no difference