The problem with buybacks is that there is no evidence that they do any good whatsoever for the share price. It is an article of faith (not sure which one) that they are good for shareholders. I do concede that they are good for advisors and brokers. In MPO's case, they could spend $12m of our cash on this buyback and in 12 mths find the sp unaltered - in fact, total market cap has gone down by the amount spent on the buyback, commissions etc and shareholders are that much poorer. With a special dividend of same amount, market cap will probably fall similarly - no commissions this way, so company won't be quite so much out of pocket, BUT shareholders will collectively be $17 million better off. It's a no-brainer.
MPO Price at posting:
69.1¢ Sentiment: Buy Disclosure: Held
