GXY AGM DAY, page-109

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Wary1

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29/05/19

15:06

Post #: 38804420
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Originally posted by Darkstone: ↑

Yes. They confirmed Shipping and sale for the quarter.

Share buyback: Depends how it is done. In this case the aim is not so much to actually buy back the shares as to under pin the price. DWS did this for many years very successfully. They used the buy back to underpin the extremes of the share price and by placing an effective floor during times of maximum pressure and then eased off during low pressure or rises. In this case the buy back only needs to aim to take about 5% of the shares off the market at strategic points to neutralise the more egregious shorting. Spread over a year that would be enough to bring the whole thing to a standstill. It would need better PR to go with it for a more completely managed SP. The aim is not to stop fluctuation but to raise the risk of shorter greed and extend the time frame over which they have to work. At the moment the cycle is too short because there are too many committed GXY retailers, and not enough at the same time. Too many to allow the price to drop with no sales (thus eliminating profit) and not enough to counter the amount of capital available for lending. The capital is available because the investment horizon is too long for an expectation of a permanent upswing in the short term, and therefore there is little risk to shorters, and the lenders don't expect to see an uplift for many months so have an active incentive to lend in the interim, shorters are confident that the sector is slow and they will be able to buy back as needed. At the moment it is all too predictable. A long term, slow share buy-back changes that predictability by slowly squeezing the market.

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That's a good analysis Darkstone. I agree with you a share buy-back would be a good thing to underpin the price. The BOD needs to protect the interests of its shareholders and put a floor on it. It is depressing day in day out watching the share price drop a small degree (like it is at the moment 0.32% down) on low volumes.

Last edited by Wary1: 29/05/19

GXY Price at posting: $1.55 Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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