Here's my take on the Dec raise and June buy back announcement.
Race raised $30M with a scalable raise in December that was over-subscribed at the top of the scale and was done through an SPP issuing an additional ~6% shares in the company. Any holder could opt in. A small holder could grow their ownership proportion, large holders would be slightly diluted.
Six months later, the share price is in the toilet (much to the delight of some posters*), and the company has announced a buy-back for about 2.5% of the SOI.
I don't like that the share price is down, it feels scary and doesn't have any of the exciting frisson of a climbing price. However, I do like that the company is using excess cash to buy back shares - it costs me nothing and effectively increases my proportional shareholding in the company by 2.5% if the full buy back proceeds.
A Value ArgumentFor me, the key element here is ... the share price isn't
value ... it's just the price of the shares. As a long only investor I buy shares where my calculation of perceived value is higher than the share price. In the instance of Race that value is a buyout value or the value of a revenue or royalty stream. That value has only gone up in the last 12 months due to fundamental results in company work (melanoma, breast cancer, AML, 22 others, cardio protection) and external independent trials (FTO [p-value ~10^-9 for involvement in cancer progression], 27 other cancers, type 2 diabetes, AML).
The buy back increases the
value of the shares; it's a good thing for holders.
A Shareholder Treatment Argument
The buy back is sending money to shareholders and increasing the value of other shareholders' shares. It's a positive. It's not getting screwed.
You're saying holders have been royally screwed by management here, I see it as kind of the same but the opposite. From late 2019 to early 2021 shareholders got a very nice seeing to in a luxury hotel overlooking the ocean with room service laid on, thank you very much! For the next 15 months it's been a roller coaster ride. But here we are, it's effectively the morning of the last day of our long weekend away, we're fresh from the shower, we've got a late check out courtesy of our cardio protection credits, we've come out fresh, looked one another in the eye and decided ... why the hell not, let's Marvin Gaye and get it on!
Not advice, or even a suggestion, but I'm a retail shareholder and I like the buy back.
*I'm not referring to you Slick, you seem to share empathy with holders on the price.
(20min delay)