RE:RE:RE:RE:earningsThat is your opinion Navajo, and it is totally worthless to me. Sorry but you are, in the end, just the same old troll as all your other aliases. Resorting to name calling and insults when you don't have a point. You can't use reason or logic to defend your asinine ramblings so you throw out the verbal attacks.
The average purchase price has been 4.50 since the NCIB progam started so for the entirety of the progam PIPE has overpaid for the entire block of shares. So the past 5 weeks are currently not relevant until the price recovers. Moreover, they've spent 30 million dollars so far.
Your hypothetical scenario has is so superficially contrived it can't be taken seriously.
Lets take your scenario a bit further. Lets say the company in your scenario overpaid by 12.5% for their sharebuyback program. They've just overpaid for shares that the new buyer doesn't need to buy for control. There is no guarantee that the shareprice would go up in your scenario, as we have seen from reality, it can go down.
Furthermore, why is the dividend only 1 time in your scenario? Other than to prop up your faulty logic that is. It only takes 3 dividend payments to supercede your simple math.
Another thing to consider is what an investor could do with that dividend payment. It doesn't just evaporate once paid. The dividend could be invested in something else that generates a gain bigger than the 1.11 gain you theorize. Who's to say that an investor wouldn't be better off deciding what to do with the dividend. Maybe they buy more shares of your hypothetical company and netting more in the buyout.
For me in order of what would be best for share price the extra cash should have been directed to pay down debt faster even before investing in growth. After that a starting a dividend progam for long suffering holders would be a nice and more valuable reward. I will always give precedence to a company that pays a dividend over one that trys to inflate value with share buybacks.
navajojoe wrote: skiptoggle wrote:
Share buybacks are a poor way to invest money and seeing asthose shares were bought at prices higher than current share price make it even worse.
The shares they bought back for the last 5 weeks have been at or below today's share price.
I realise that stupid investors think that getting a dividend is the best payback, but it does nothing for the company. Buying back $8 shares for $4 is a good investment. If you take our current situation PIPE has bought back
Take the buyback to an extreme example. Say a company has 100 million shares trading at $4. Option 1, they buy back 10% of the shares for $40 million, then sell the company for $1 billion. Shareholders would get $11.11/share.
Option 2, the company pays out $40 million in dividends, or 40 cents/ share. Then the company sells for the same $1 billion. Shareholders would get $10/share, plus the 40 cent dividend, for a total of $10.40.
Funny how some people cannot do simple math.