MLX could announce a share buy-back of up to $50m without fear of a cash drain IMO.
After all cash receipts come in we’ll be sitting on circa $135m in cash and generating around $230k in free cash flow per business day on current metrics.
Based on a SP of 28.5c the $230k of daily free cash flow would buy 800,000 shares and we only trade 2-3 million a day so it would be difficult to accelerate any buy-back beyond free cash flow therefore removing the need to tap into the current cash pile.
APAC appear to be happy to increase their holding above 20% via the creeping rule and are currently sitting at 21.83% of MLX. Not sure of the rules here but a $50m share buy-back which is 20% of outstanding shares would see their holding increase to 27.3% without having to dip into their pockets.
A buy-back to me seems a win-win for all involved:
·Current cash pile not needed
·APAC could accelerate their creep rate
·Shareholders see a floor put under the SP and improved likelihood of SP strength
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