RE:Resumption of stock buybacksWhile the initiation of buybacks is a step in the right direction, the rate of buybacks, so far, is low and not indicitive of an effort to affect the number of outstanding shares as one might hope. The company has been repurchasing at the rate of only about 17k per week; an annual rate of 884k representing less than 2% of the outstanding - this would take over 11 years to get the Class A share count down to 30MM - a much lower rate than in the past where buybacks were effective in reducing the discount.
Bear in mind that Caldwell has a long track record of prioritizing personal interests over those of the other Urbana shareholders. Buybacks, however small: allow Caldwell to appear like he is doing something to affect the discount thereby quieting shareholder discontent, serve to give a small boost to overall fund returns and his own holdings, while not substantially reducing the size of the fund on which he depends on for fees ( 884k shares at $2.50 would cost the fund $2.2MM, or less than 1% of the NAV per year).
Perversely, becasue Caldwell is not concerned with the liquidity of his holdings in the short-term, he is motivated to do buybacks while the discount is highest - this maximizes the long-term value of his own holdings. Had Caldwell not, in the past, given lip-service to, and shown indifference to taking some of the other obvious steps that should be taken to address the discount, I would have more confidence that the recent buybacks were not done entirely out of self-interest.
It is worth noting that the buybacks done so far have been done with borrowed money and the fund's leverage has increased to over 10%. I believe (though not sure) that the management fee charged by Caldwell is based on gross versus net assets, so leveraging up the fund is a way Caldwell would get increased fees without having to improve NAV.