The similarity is that neither is good for shareholders; please show me if I'm incorrect here.
Printable View
Gee - a reasonable day again on okay volume any theories see average broker valuation 76c (only 2 brokers though), anyway maybe people seeing value.
Hi team,
just received my "information pack" asking for shareholders approval to allow the proposed share buy back. I noticed that some people in this thread have quite strong opinions on this subject, however personally I haven't yet made up my mind. So lets list the pro's and con's of the proposal as I see them:
So - what speaks for the proposal?
* Share buybacks can be an effective method to stabilise a lagging the share price. For example NPX is currently running a share buyback schema, and brought the SP onto a nice upwards pointing trajectory ...
* If the share is undervalued at buy back time, than buying it back by the company is obviously a great method to increase value for all remaining shareholders. Question - is it currently undervalued? Analyst consensus view seems to suggest so:
http://markets.ft.com/research/Marke...asts?s=NZO:NZC.
* the market seems to react really positively to the proposed share buyback. SP rising, and just noticed that median SP forecast moved overnight up by a notch from 75cts to 85 cts (see link above).
What speaks against the proposal?
* share buybacks sometimes have a funny way to act out - remember e.g. IFT's big share buyback and the SP dropped afterwards like a stone ...
* ZETA is likely to increase its corner stone position by stealth above 20% without paying a premium (actually - without paying anything);
* an admission that directors might be clueless to find in the current target rich environment no better way to increase the companies value than by buying its own shares (but than - what harm in letting the truth come out ;)).
* less liquidity of NZX shares after completion of the buyback program (and stock liquidity isn't really flash at current)
So, yes - I do see pros and cons, but still can't see a huge tilt towards either side. I would be interested to hear why some of you strongly oppose the proposal.
Seems this whole waste of money getting shareholder approval is solely due to ZETAs major holding.
Then again it also benefits the huge number of shares in the employee share scheme!
I see in the quarterly report that Kaheru drilling has been quietly dropped as well, better to spend the money on the buyback?
They also make no mention of the other great achievement this quarter, getting dropped from the NZX50
Mate, I'm for it,
Don't like Dividends, Mr Tax Man likes them far too much. (but each to their own)
I believe it would bad play from any company whom believes their stock is greatly undervalued to pay out a divi compared to a buy back.
I do agree that the Zeta situation could be of concern. Who would know what they have planned.
New to this company, jumped in at 62 and again at 58, Hopefully I've got this one right. but an Mcap of 200m for a company with +100m revenue and plenty of fat to be trimmed if things got tight.
Good Luck For Your Decision Making!
Hi all
NZO meeting cancelled? Not all above board? Comments.
-dodgy (owner/shareholder)