Ann: Update - Notification of buy-back - MLX, page-28

Here are some of my views on Buybacks, Dividends and Growth Investment:

Share Buyback:
Only do it when you have ample uncommited cash and you believe the market has substantially undervalued your business. An active buyback tells the market we believe we are currently undervalued which can spark new investor interest and can also generate additional daily trading volume making for a more liquid stock and an opporunity for sellers of large parcels to exit with less SP volatility. As shares are bought back and cancelled if the market reduces its value of the business equal to that of the cost of the buyback than the SP will not improve however if the market maintains its value outlook or increases it as a result of increased investor interest than the SP is likely to increase. A SP may also benefit from a buyback if it results in the removal of a large motivated seller.

Dividends:
Only do it when you have ample uncommitted cash, you believe the market has you fairly priced and there are franking credits available to shareholders. Franking credits are arguably what makes dividends attractive.

Invest in growth:
Makes sense to me if you're stting on a dormant asset (Rentails) that can deliver long term value and you have the funds needed to develop it or a company (First Tin) is sitting on an asset that you have the expertise and means to extract value from and the market currently undervalues the asset.


The MLX board IMO has made it very clear they want to use the cash to grow the business and I have no doubt they have their eye on assets beyond just Rentails and First Tin.