Post by
15Stanmore on Jun 14, 2020 12:22pm
Share repurchases do not make sense
A recent posting suggested that is would be a positive thing to use a return to profitability to repurchase BPLI shares at their current low market prices.
A company whose financial statements record a negative book value per share should not be repurchasing its shares, no matter how low they are trading.
I would suggest BPLI is looking more like a takeover candidate where the buyer can offer a per share buyout offer at significant increase over current market value to acquire existing valuable IP that is not reflected on the current balance sheet.
I am also still puzzling over the writedown of tax assets from previously expensed R&D costs that arose when they split the company into the two independent divisions, and the current tax rate on newly profitable earnings.
Any other thoughts from long suffering investors like me?
My only other contribution is the message to shareholders that the current market price is about half the price of the exercise price of the options earned by insiders - a purchase in the open market today would give a 100% return by the time the insiders would start to enjoy economic benefits from the options they have been granted to date, should the share price start to recover from current levels, or a buyout offer be made.
Cheers.
S