Eurocontrol Technics Ord EUCTF

RE:RE:Buy back program on DGLY

[shawshank]

Stack_ disagree strongly...any company that repurchases its own shares enhances shareholder value vs expends it and for every two that do not see this demonstrated there are ten that do and will.

SS

stack wrote: xsnrg, 
I still stand by the opinion that share buybacks for micro cap companies are not the best use of cash. They should be able to find a better way to enhance shareholder value in my opinion.

As for your DGLY example....that stock was in serious trouble - just look at the chart - it had plummeted from $18 down to under $5 in the past 3 months alone (it was at $33 only 12 months ago) so the company obviously had to pull out all the stops to try and halt the stock price crash. So yes, in the very short term its up off the extreme lows but its still a horrible looking chart and who knows if that stock will re-visit its lows once the euphoria of a stock buyback program wears off.

I disagree that a stock buyback puts "tons of upward pressure on a stock". It may help short term in some cases....or it may have zero effect whatsoever..........check out PHM. It announced a share buyback of 14.5 million shares on August 5th when the share price was 0.89 cents.
Today, just 3 weeks later and even after a sizeable rally off the bottom on monday, the share price is at 0.64 cents. So the stock has FALLEN close to 30% since the share buyback annoucnement. Tremendous upward pressure? Didnt see that.

So each stock will react differently to an event such as this but rather if EUO can invest in the company's future itself, make a strategic acquisition or do something else that will be to the benefit of all shareholders going forward, I think thats a much better use of that precious commodity, cash.