My "Logic" mistake? Let's do a simple example.Company has a float of 10 shares. Book Value per share currently $5.00. Total "value" = $5x10= $50.
Situation #1.
Company buys back 10%, 1 share at $2.49.... What Happens?
Share count drops to 9.
Total Value drops to $47.51
Book Value per share = $47.51 / 9 = $5.28 So Book Value goes UP by $0.28.
Situation #2
Company buys back 10%, 1 share at $5......
Share count drops to 9
Total value drops to $45
Book Value per share = $45/9 = $5.00 So no change in Book Value per share.
Applying my previous "logic" on current buybacks on situation #1 I would have did....
Gain on buyback of $5 - $2.49 = $2.51
But cancel share $2.51 - $2.49 = $0.02 !!!!!! that's not the same as $0.28
YA!!!! I'm way out to lunch in my previous thinking.... LOL, it made sense at the time, but doing a simple example proves I'm CRAZY.
Situation #1, is similar to PXT situation. As seen in simple example, Book Value goes up significantly.