But Buy back at what price.
If the insiders own over 50% of the company then they can opt for a compulsory buyback at a specified price.. Usually last 3 months S.P. which if the company is undervalued is not good news.
But if the company is down ramped or investors lose confidence the share price falls (as it has done with SHE) then a compulsory buy back would be below far fair market value potentially short changing investors.
Don’t know what % of ownership the chairman, secretary and CEO have of SHE and if they have greater than 50%.
ASX:WAT has been doing a buy back for well over 2 years and all its done is held the share price steady.
ASX:GRR had a large cash holdings and low Enterprise value (Like SHE) and the same discussion occurred on hot copper. There was even talk of the mines running out of Iron ore etc.
Normally GRR dividend was 1 to 2 cents per share, but they decided to return some of the cash to shareholders by issuing two dividends of 10 cents on 11/3/2022 and 15/12/2021.
These two dividends were catalyst to send the share price going from 50+ cents to 179 cents in under 6 months and holders got the dividends realising a profit of over 300% if they sold.
Until the catalyst the share price was stagnating and clearly undervalued.
The Chairman of DMG(dragon mountain gold …also chairman of SHE) returned around 95% of the cash holdings to shareholders a few years ago as a special dividend after deciding via a vote. Sine then DMG has stayed at a very low price doing nothing .
