Debt free future - what then?It is now clearly that GXE will be debt free, and the question is just when and what happens then.
Clearly, they know that buyback is so much better than the dividend but there must be a good reason why they do choose dividends over buyback. It tells me only one thing - large shareholders and management choose a very long game. it can be 5-10 year long game or even longer. That is usually the case.
What is the difference between dividends and buyback - with divs you have flexibility to do what you want with cash and with buyback the same cash goes towards buying shares. With divs currently you can still increase your share count by 10% annually and the price of stock stays low where with buyback you get a larger share of the company and the stock price goes up.
However the disadvantage of buyback is that stock price driven hgher becomes a larger burden on the company in relatively short term.
So my conclusion is that they choose a longer game that will not become a heavy load early in the game as they learnt when they spent like $5 mln and only purchased less than 3 million shares in 2022. If you are in Gear Energy - do not expect any crazy share price growth, it will be painfully slow. However the winners will be those who slowly increase their share counts with divs over the next 2-3 years. I do believe true long term holders will be nicely rewarded.