Baytex Energy Corp T.BTE

Here's my question for Greager...

[Nextlegup]

At what point do you give up the view that buying back stock is better for shareholders than paying down debt?

Greager stated they were open to having that conversation during his last conference call I listened to...That was when BTE was trading a good $1.60/share+ higher than present...Yet, when I reached out to investor relations, asking this same question and voicing my view that the Baytex discount was because of it's debt, I was rebuffed and stated that management felt buying back shares was the best approach...

I've since sold all but a small portion of my BTE shares...

Managaments "speculative" view of paying back debt vs retiring equity is proving to be very wrong as those dollars "returned to shareholders"  are now worth a fraction of the investment.

I would suggest management revisit it's priorities, and changing the view that paying down debt is far more important than the share buy backs and the divy itself, as the share price and enhanced confidence in the direction of the company will enhance shareholder value...

[Moemoney42]

Agreed, I've never been an advocate of share buy backs until the debt is near zero.. the interest savings per year will fund a lot of dividends and share buys once the debt is 1/10 of where it sits today.. that's what I'd be shooting for as a CEO.. 

[riski]

With a flat or rising share price, buy backs look pretty good. With a falling share price, buy backs look bad. It's a bit of a gamble which is why most companies take a measured approach of doing a little of both share buy backs and debt repayment. 

[Moemoney42]

I've said this many times but get alot of push back, but I still stand by my thoughts that a 1 for 2 consolidation would fix alot of issues, including a large share count.. get us away from that $5 margin level for good so investors don't get margin calls everytime the share price drops below $5 CAD and not to mention again, many US institutions will not touch a stock under $5 USD

[Nextlegup]

Moemoney, I would be inclined to agree with you on the consolidation considering the way the share price has moved these past six months. The other big plus, if you tighten up the share structure...The Algo's won't have quite the same "free reign", as reducing liquidity will certainly have to ad an element of caution to the volumes and influence of their trading..

[Moemoney42]

Yup and anytime you can reduce forced selling by margin calls the more stability you'll get in the stock price.. IMO

[MoreCarbon]

A lot of what it's. What if baytex had an approved sib when the stock price was below 40cents? A 100M loan to buy back at that time would have had people freaking that the sky is falling. Looking at it now gets the same people upset. Why didn't they buy shares when it was that low? Can't win. I don't like debt either but when something as profitable as bte is at a 50

[1234bmth]

At that time BTE was in the edge of bankruptcy, no financial institutions would had given loan to BTE and the existing creditors wouldn't had let BTE to buyback shares.

[Nextlegup]

We're all discussing the options and "what if's"... You'd think Greager would be more aware of the implications of being "over leveraged" with the history Baytex has had as opposed to thinking it's gonna be nothing but "Sunshine and Lollypops" all the time... He's gotta learn how to mitigate the risk...and buying shares back doesnt do it...