Open to abuse… -Unsure what you mean here.. Ideally if a companies stock is undervalued you want a buyback for a few reasons, a) it may genuinely be the best use of capital in that you might When coal were prices were extremely high many shareholders in both NHC and WHC were suspicious what was the motives for the respective boards initiating a buyback. The driver of the share price was the demand for the commodity not the buyback….if my recollection is correct both companies were heading for an AGM.
There were lot of chatter on HC about the unexpected Buyback being introduced!
Bollocks. The buyback reduces the float so you have a higher percentage. Future activities that increase the float will undo this, but I'm not playing the 'ifs and maybes of future decisions game' I think ur statement amounts to agreement it could only a short term position. Like the example of SUN it also achieves this aim but under a fairer system.
Typically find those that skew younger or otherwise already making a full wage or equivalent will prefer a buyback as it pushes more of their returns to capital gains rather than income. I think the gist of my posts were referring to institutions who would be pressuring the board that the intent of the buyback was to be tax beneficial to them. Once again, I will reiterate that my posts mentioned a number of times to ignore normal dividends!
My understanding using the company examples that I mentioned in my last post - SUN and WES. I believe in these form of return of capitals, professional traders and institutions would be compelled to pay income tax.
Under the NHC buyback scheme it gives these institutions fiddle time fiddle to adjust their holdings and minimise their tax obligation.
You welcome to explain to me the differences between the 3 forms of return of capital and if there are special ATO criteria’s that had prevented the NHC board opting for the other 2 options.
Why couldn’t the NHC board do what SUN did recently or what WES did in 2021”
NHC Price at posting:
$4.20 Sentiment: Hold Disclosure: Held
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