Companies do not perform "buybacks" to hold onto the shares with a view to sell them later like a trader. The primary purpose of buybacks is to return capital to shareholders by using company funds to buy shares which are then cancelled, resulting in a lower no of SOI and therefore higher EPS - essentially the opposite of dilution.
I think I haven't made my position clear. I am not against the idea of the company buying back shares at current market price. I am simply against the idea that the company would use its precious funds to do so. It wasn't long ago that we had this ridiculously long discussion on here when a lot of people started getting nervy about the company potentially running out of money and needing a cap raise. Based on the calculations we did plus some commentaries from SN regarding only doing certain things if funds permitting, we know the company is funded to execute what it wants to, but only just. If not out of pure emotional desperation, why then would we suddenly want the company to spend money to buyback shares for the sole purpose of scaring the shortsellers and trying to support the share price? If we think it's appropriate for the company to use that precious shareholder funds (which belongs to ALL shareholders) to buy back shares, we should first be willing to either tip more money into the company or use our own money to buy shares ourselves.
The time to maintain a cool, calm head is usually during stressful times when it is hardest to do so. And all I smell on here lately is an increasing level of fear and desperation, and a decreasing level of level-headed objectivity. I get it - it's hard watching your biggest holding get whacked day in, day out regardless of news - with no apparent end in sight. Some may even have overcommitted their position and need to sell to live, some may simply be trying to hang on for as long as they could. Everyone's position is different. Contrary to what it may seem, I too feel some pain when I look at the total return figure at the bottom of my screen. Yes, I am probably better cushioned against the fall given I had sold multiple times and locked in some decent profit, which also gave me the funds to buy even more. But it doesn't mean I don't feel the pain. We all do. But I also know from experience that emotion + money = guaranteed disaster. So it is during times like these that I fall back on my valuation process, which I know has stood the test of times for nearly 25 years. Yeah, I have gotten a few badly wrong during those times - excretion happens, learn from them and move on.
In STX's case, the current price/value gap is so large that it doesn't really require a degree in financial analysis or quantum physics in order to identify that gap. So it comes down to one's confidence in the market's ability to price an instrument (STX shares in this case) correctly. If we look across a wide spectrum of shares across ASX (and global markets too), we will find a large spread of gaps ranging from undervalued to overvalued (relative to our valuation process anyway). But over time, they almost inevitably will revert to what is the correct price. If one loses confidence in that, then one really needs to consider walking away altogether. I also need to remind people that it is the very same market which often overshoots as well as undershoots. One cannot readily and happily accept overvalued situations but bitterly complains about undervalued situations.
PS. My last comment on the buyback. I think I have said all that needs to be said from my side. Unlike other broken records here who can repeat the same thing a million times without getting bored, I do...
(20min delay)