Really refreshing to engage with someone knowledgeable and in a productive fashion. Before I start, may I just correct an error and then ill continue.
If you buy back shares, you do not provide a dividend, correct, but, you do, increase EPS. You have stated a buy back does not increase EPS.
The buy back is not to increase the SP. The buy back is simply the start of returning capital to shareholders. It should also as by product hamper those with deep pockets pushing the SP down so as to buy from retail where there is natural attrition due to bills etc.
We all feel that this is a $4 share. That is not unrealistic. Buying a share at 1.25 is value of 400% for other holders. (minus opportunity cost and interest) If opportunity cost is 12% interest then a 400% gain or even a 100% gain at $2.50 is a no brainer. I do not see any benefit in providing a dividend to a grossly undervalued share price. Why give a dividend to people who do not want to hold the share? When the SP is at a value closer to a fair value, then, by all means do both. Buy back and give a dividend.
One assumes the share price will naturally rise. If the enterprise value is constant the share price will need to rise to make the value the same. As the EPS rise due to decreased share registry, one expects the market to notice and buy the share.
One can hope for under 200m shares and a billion dollar valuation.
$5?
KCN Price at posting:
$1.27 Sentiment: Buy Disclosure: Held
(20min delay)