Aris Mining Corp T.ARIS

Eh management...can you live with modern times ?

[Brioche]

...And so the game goes on. The money from trees finds its way into the stock market in numerous ways, one of them being corporate buybacks. According to a recent article at Zerohedge, fully 40% of the market's rise can be attributed to this source. Some of the companies that borrow for buybacks are sitting on surplus cash of their own amounting to billions or even tens of billions of dollars. Why use real money, they have concluded, when they can borrow it at near-zero rates by issuing bonds to yield-starved investors?  And so they continue to plow borrowed money into their own shares, driving the shares into outer space without producing a dime's worth of actual economic growth. Everyone appears to win in this shell game and it continues at a crazy pace, even if all the players understand full well that a rally attributable solely to inflation is ultimately unsustainable.

[ChupacabraBueno]

Good post Brioche, Buybacks are an obvious strategy in a prolonged period of low interest rates. In the case of GCM it makes more sense than most, as they are very undervalued, very profitable and flush with cash - $450 million was the figure quoted days ago, not quite equal to their market cap but close. If the market insists on undervaluing their shares what better investment could they make?

[tsoprano24]

Brioche, therein lies the rub. Most companies should not be doing buybacks. Buying back stock when available below book value is mostly a wise decision. Not always, but in our case it is. We are real, with real investments and mines. But, there are crooked managements doing it to reach bonus levels in EPS. Buying back stock allows them to lock in bonuses because of better EPS while adding debt

[Wayned52]

There is very little real regulation in the markets anymore or a reason for politicians to stop the party . Last week I read an article about several hedge funds that are buying destressed companies for peanuts . Then they borrow heavily against them and distribute the money as dividends . Just like COD`s  and Ninja mortgages in 2008 , what could go wrong they thought .    I see

[likeike]

maybe we should borrow from these guys     Read more on this topic     (Bloomberg) -- Colombian delivery app Rappi Inc. is preparing to go public next year in

[clubhouse19]

I have been saying that for several years and many think I was out to lunch. I explained how the authorities made up the rules to favor the houses and hedge funds as most of them are clueless of the consequences but get hosed by the lobbyists.

[kkkrrr]

sometimes this males sense.. but not when a company tradex 3 or 10x book-value ---   buying back shares below book-value --yes ...   

[Stratocheif]

When u borrow for buybacks all ur doing is reducing equity dilution and increasing debt. Anyone who further bids up the share price because of this is an idiot. But that's what the stock market is isn't it...a parade of idiots.

[Heywood_Silvers]

Buying back stock (creating treasury shares) is a bit of a mixed bag.  If the enterprise is in a cash crunch or can reasonably forecast a pending cash cruch, it would be insane to swap out equity for debt in the capital structure.  If, however, the enterprise is flush with cash and perceives no liquidity risks on the horizon, the process of increasing their leverage within their capital

[ChupacabraBueno]

Did they borrow for buybacks or did they borrow to develop Toroparu, swap out expensive debt for cheaper debt, etc. If you're sitting on $450 million in cash why would you not give yourself the option also of buying back your undervalued shares? Buying is optional. So no downside to the NCIB that I know of.

[kkkrrr]

they have the cash for Toroparu + Cashflow from Q4 and further ....    Q3 they spended some money for expansion and the new plant for the tailings + exploration ....    next quarters they will make a lot of cash from operations... investments in expansions are mostly over....     so there is enough free-cashflow for paying dividends+ buybacks available ... 

[menoalittle]

>> ......   extremely undervalued stock yep. Let's Go Brandon!

[Heywood_Silvers]

Seems most everyone thinks that GCM is about the most undervalued gold producer out there. "Let's go Brandon"!!

[WindsorGuy]

I also own Caledonia whiched left TSE and now listed on Nasdaq CMCL. Also very cheap. GLTA