The number of holders could be reduced in the short term, lowering liquidity, but the buy-back should boost EPS and potentially dividends in the medium term. Also in the medium term, number of holders should reach equilibrium again.
Eg. They buy out 10% of holders.
Liquidity is reduced for now. You can only buy if you'll pay a high price.
EPS rises for the other 90%.
The SP goes up for those 90%.
The 90% become too heavily weighted in XPD.
They sell some of their XPD.
New holders take up some of those shares.
The number of holders is back where it started.
It's an optimistic scenario, but I think the liquidity issue is short term. Also, the liquidity issue would be a lack of sellers (no shares available to buy) since the company bought a lot of them out. For there to be a lack of buyers (no way to sell your holding), the share price would have to become unreasonably high, which is hardly a problem in my book.
If you're worried about a lack of sellers due to the buy-back, then buy now before the buy-back is in full swing.
XPD Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
