CuDeco explores buybacks
JAMIE FREED
September 29, 2009
Insider, Jamie Freed's new column, looks at what's happening in boardrooms, back rooms and the world of markets. Click back here for the latest updates.
Queensland copper hopeful CuDeco is never short of head-turning moves.
The latest puzzling decision taken by its executive chairman, Wayne McCrae, is to conduct its second share buyback in the past 12 months.
Most exploration companies tend to spend their cash on, well, exploration. Or perhaps acquisitions. In any case, buying back shares tends to be very low on the list of priorities.
Some shareholders are particularly surprised by the timing of the CuDeco buyback because it conducted a $52.5 million capital raising in June at $2.50 a share.
Following some good exploration results from its Rocklands project, CuDeco shares are now trading closer to the $5 mark. So it appears to be willing to dilute at a lower price and spend a higher price buying back the shares with help from broker BBY.
CuDeco is seeking to buy back up to 10 per cent of its capital, which would cost about $58.5 million. It had $54.8 million in the bank as of June 30 and recently completed an earlier buyback on which it spent $3.85 million.
A buyback will serve to boost the percentage of the company held by McCrae, which now stands at 10.3 per cent.
CuDeco announced the latest buyback yesterday. Normally, buybacks tend to prop up a share price. But curiously, its shares have fallen today and are trading 25c lower at $4.95, which could indicate some investors are questioning the merits of the strategy.
CuDeco has yet to provide any explanation for the latest buyback.
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From this, you'd think that WM is very confident that the company is undervalued and he would be able to raise further capital at a good price further down the track.
Been a shareholder for 6 years and this guy still amazes me (good and bad).
JAMIE FREED
September 29, 2009
Insider, Jamie Freed's new column, looks at what's happening in boardrooms, back rooms and the world of markets. Click back here for the latest updates.
Queensland copper hopeful CuDeco is never short of head-turning moves.
The latest puzzling decision taken by its executive chairman, Wayne McCrae, is to conduct its second share buyback in the past 12 months.
Most exploration companies tend to spend their cash on, well, exploration. Or perhaps acquisitions. In any case, buying back shares tends to be very low on the list of priorities.
Some shareholders are particularly surprised by the timing of the CuDeco buyback because it conducted a $52.5 million capital raising in June at $2.50 a share.
Following some good exploration results from its Rocklands project, CuDeco shares are now trading closer to the $5 mark. So it appears to be willing to dilute at a lower price and spend a higher price buying back the shares with help from broker BBY.
CuDeco is seeking to buy back up to 10 per cent of its capital, which would cost about $58.5 million. It had $54.8 million in the bank as of June 30 and recently completed an earlier buyback on which it spent $3.85 million.
A buyback will serve to boost the percentage of the company held by McCrae, which now stands at 10.3 per cent.
CuDeco announced the latest buyback yesterday. Normally, buybacks tend to prop up a share price. But curiously, its shares have fallen today and are trading 25c lower at $4.95, which could indicate some investors are questioning the merits of the strategy.
CuDeco has yet to provide any explanation for the latest buyback.
====================================================
From this, you'd think that WM is very confident that the company is undervalued and he would be able to raise further capital at a good price further down the track.
Been a shareholder for 6 years and this guy still amazes me (good and bad).