Is buyback allowed / legal during this week, while the DRP share price is determined?
As buyback can influence the share price (upwards, as there is no "sell-back"), should it be suspended for this week?
What are people's thoghts on this?
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According to disclosures they have only bought a tiny parcel at 1.25... So buy backs haven't been a cause for any of the price jumps - unless they are late in a disclosure..
Good timing for Pike bad news though - keeping the price in check this week hopefully.
KS,on thinking about this a bit more my thoughts are that whether it is legal or not is not the point. By offering all NZO shareholders a DRP a agreement of trust as been formed between investers and the company. If now the directors after the agreement order a buyback they have broken that trust regardless of the legality. This problem of having a buyback in this week set aside for determining the DRP would not exist if prior knowledge of a buyback had been made immediately available.All investers could then weight up what they wanted to do in full information.
For NZO it is important to keep trust with investers at all times.Remember there are many years ahead and the future is just tooo important to play around with getting away with this this time
Let the market decide the DRP value with NZO being completely neutral and more importantly being seen as completely neutral.
Well, the second announcement is only for 3173 shares.. so again not really that material - less than 1 % of the volume traded.
Remember that it is JBWere that has been told to acquire the shares for NZO, they aren't doing it themselves. JBWere should also be aware that they can't acquarie shares pushing it up significantly. They also have till mid next year to acquire them, so there is plenty of time to get them.
I'm surprised such a small buyback is holding the price up, 3173 shares is a miniscule number, maybe NZO is holding up on its own merits.
Certainly is a conflict of interest in my view, turn it round the other way, if NZO wanted to depress the sp for some reason all they would need to do is sell a few off to depress the price each day. Us minnows don't seem to have much control ??
Well, I was assuming there would be rules around it. More in relation to moving the Price significantly though, not sure about when a DRP is in play. Hopefully the broker doing it is smart enough to know not to move the price at this time, but.....
Found the ASX rule on this, but not the NZX one yet, but maybe the wild west doesn't have any....
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg101.pdf/$file/rg101.pdf
The buy-back price must not exceed the ASX price ceiling—i.e. the buyback
price must not be more than 5% above the average of the market price
for interests (or stapled securities, if applicable), where the average is
calculated over the last five days on which sales in the interests were
recorded before the day on which the purchase is made.
- So they can move the price a bit if they feel like it...
Buying yesterday made good sense for them.. It was the low of the day, so a good pick for a buy back trade
When nzog announces it will get into the north sea-now that will be interesting.
wells cost 30-40 million pounds, so nzog's 80 million kiwi isn't going far.
another hair brained scheme dreamed up by the company that has given its investors a big money pit called pike which will never fulfill its much hyped expectations.