RE: News: what it meansHcase wrote:
TC, I think you're on the money.
A reminder that NCIBs are not declarations that the company will necessarily buy the number of shares that they list; it means that they may buy that many. I have seen NCIBs with few shares actually purchased.
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Yes, I have seen people in various forums make this valid point...the news announces that Capstone has the right and intention, but not the obligation, to buy shares in the market. They want the flexibility to buy shares or not buy shares as needed.
I think the news means something in the middle of two extremes. One extreme is that the company is in effect jawboning the stock price higher. The other extreme is that the company intends to buy the full allotment of shares they are able to buy. I think the truth is in the middle somewhere. They probably don't expect to buy the full 8 million shares but they aren't just talking up the stock price either. The news is in effect a declaration that they stand ready to buy stock at these "dumb" levels if people are "dumb enough to sell them". Of course, I have no idea where is their line in the sand, or up to what price they will pay for their stock, or how aggressively they intend to buy the stock. What I do know is it is good news for the stockprice and for shareholders.
An inportant final thing I want to say...I don't believe this action precludes Capstone doing an acquisition, even in the near term. To the contrary, this action is likely being taken to groom the stock for a future acquisition or takeover or merger, by making the stock price higher. This action increases the odds that a bid for the company will be less undervalued. It also will reduce dilution should Capstone pay X dollars worth of shares in an acquisition. This management has done a great job delivering value and actually doing good things...building a mine...making money...creating Silverstone...turning Silverstone into "Silver Wheaton Jr."...etc. I have ample reason to give management the benefit of the doubt they know what they are doing.
TooClassy