Share Buy Backs

Hi,

I am just curious on the opinions and or experience on the effects on SP of a buy back of shares from companies, I have been monitoring SHV in particular as they are in the process of this, but thought this is more of a general topic as this is happening to a few companies thats why its in this thread .

I have read that some directors (ie ARQ's) feel that there is often little reward for share holders for some buy backs in regards to SP.

What do ASFers think on this matter?

Re: Share Buy Back

surfingman said:

Hi,

I am just curious on the opinions and or experience on the effects on SP of a buy back of shares from companies, I have been monitoring SHV in particular as they are in the process of this, but thought this is more of a general topic as this is happening to a few companies thats why its in this thread .

I have read that some directors (ie ARQ's) feel that there is often little reward for share holders for some buy backs in regards to SP.

What do ASFers think on this matter?

Click to expand...

Hi surfingman,

Well, I have seen some effect on the SP when the buy back is announced. After that, there is no much effect on the SP because they normally have some volume limits on how many shares to buy per day and those limits are low in my opinion.

WBII

Re: Share Buy Back

surfingman said:

Hi,

I am just curious on the opinions and or experience on the effects on SP of a buy back of shares from companies, I have been monitoring SHV in particular as they are in the process of this, but thought this is more of a general topic as this is happening to a few companies thats why its in this thread .

I have read that some directors (ie ARQ's) feel that there is often little reward for share holders for some buy backs in regards to SP.

What do ASFers think on this matter?

Click to expand...

Hi. If a company, the likes of BHP or RIO, announce a buy-back then it is likely to be carried through. Buying back 10% of the stock whilst still increasing profits will also increase dividends and the stock price. Many smaller companies announce a buy-back and say "We can see no better investment than our own shares". After the year goes by they appear to have stopped buying back and seem to forget the idea.

In the case of Rinker Group they seemed to want to get rid of cash by several years of buy-backs, cash returns and special dividends. In the middle of the third buy-back they received a takeover bid. The Directors are now uncertain as to whether these moves were correct as the price fell and predators arrived.

SBM tried a second buy-back but seemed to make less profit than expected and seem to think this was not such a good idea afterall as they now wish to expand.

Share Buy Backs !!

I am currently looking into the effects of "share buy backs". I have heard that if the companies buy directly from their shareholders (without going through a broker , and the market) , the shareholders will get a better price and tax benefits. I have been trying to research the tax implications but I am stuck. Does anyone know what tax benefits there are?

Thanks in advance!!

Qu: If a company is currently doing an On Market buyback, and they for example inform the market they have bought back say 50 million shares on a given day ...........

Could they have been, or are they allowed to "trade" their shares while they are accumulating ...... ie They sold 20 million on the day, but bought 70 million ... net 50 million ......... and do they only have to disclose the "net" figure to the market?

The implications of this if allowed, could represent market manipulation to buy the shares at a lower price ??

Anyone know the laws on this one?? Cheers.