Advantage Energy Ltd T.AAV.DB

Why Buy High when you can Buy Lower?

[TVR]

Looks like AAV just threw away around $20-25 million on the Dutch auction purchase with the share price now close to $8, compared to the buyback over $11.  A little patience and market purchases would have saved them (and shareholders) a lot.  I am not a fan of share buybacks which never seem to work out to shareholders' advantage.  The share price would have held up a lot better if they had gone the dividend route instead.  I don't care if management thinks the share price is too low, just dividend out the cash they want to spend and the market will revalue the shares.

[uwebb429]

The purpose of a SIB is to reward shareholders. You could say that the AAV shareholders that accepted the $11.20 offer were well rewarded. They are probably thinking about buying their shares back so they can play this game again.  The TSX NCIB rules that limit companies to gradually buying back 10% of their outstanding shares over the course of a year is the real problem. The cash flow

[Margin321]

You rightly mention that the shares would get beat up and punished if they started a dividend and had to discontinue it.  But the shares have already been beat up and punished, and from a lower starting point than if they had initiated a small dividend. And $100 million would have paid a 2 cent a quarter dividend for 58 quarters. They should have had a lot of confidence they could sustain

[Margin321]

Bottom line is they shot themselves in the foot with the SIB. What can you say but don't do it again. You only have two feet. 

[RusticHit]

They were in la la land when they did that as most of Investors were

[RusticHit]

Now in Dog house with Og index Up 2.5 % and it is struggling to stay in green