RE:RE:RE:Comments before I take another break from the asylumDilution due to share-based compensation is understood. But sometimes we're told that an NCIB is for us when sometimes it isn't.
On a few occasions elsewhere (SVM most often) I've posted my dislike of buybacks. The big banks and insurers are some of the few exceptions where I think common shareholders may benefit, depending on the exact dimensions of the NCIB as carried out. ENB's is too small.
1. In cases where the NCIB does not cancel dilution and merely buys shares to feed the options, the benefit goes directly and wholly to management -- their increased % ownership due to options is amplified by the NCIB, while our % ownership is still diluted. And it was our free cash flow that was used. While it may be true that we're not getting diluted as badly with an NCIB in place, we might do a lot better with a dividend (a certain return, while a capital gain from an NCIB is not certain) or debt repayment (this has some appeal with interest rates expected to rise).
2. If the NCIB exactly cancels out the dilution, it's the same as (1) except that our % ownership remains the same. But cash flow due to common shareholders was still diverted to increase management's % ownership.
3. If the NCIB exceeds dilution, substantially, the daft angels begin singing because their common shares' % ownership rose. And then they pause because they remember that their free cash flow was used to do it, and the optionholders received proportionately more then they did. The smart angels? They got into management.
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autofocus111 wrote: Ticker I'm all but certain there was steady slow dilution from stock incentives for years. In view of this don't see how you can spin the buyback as a negative. The buyback (a first, since I don't recall ENB ever doing buybacks), will offset what would have been normal dilution. It's not meaningful in the sense that it's only 1% or so of the float, but it's real.