Steve, thank you very much for clarifying the impact of the sock repurchase. However, I still fail to see the benefits :
<<1) Eliminate the over hang in CIST's stock.>> - who is suffering from the depressed stock price ( even if overhang is the reason) ? Those who believe in the long term value of the company just get a chance to load up cheaply, and those who are waiting to break even and get their money back would be the net sellers ( weak hands )if the stock repurchase is announced. On the other hand if the stock started going up on good business news ( new contracts, partnerships, licensing, etc.), they would be more likely to stick around, and thus expand the shareholder base.
<<2)Shake out any manipulators in the stock.>> - I do not see much activity in this stock period. Even if there are manipulators around it, who exactly are they hurting ? The stock has pretty much stayed in the mid $.20s for over a year.
<<3)Give the stock much needed support.>> - even if the stock does get a temporary support from the buyback, how is it going to improve the value of the company ? They definitely are not planning to finance mergers or acquisitions with their own stock, they are planning to use their cash. As far as giving a chance to those who want out now w/out incurring a loss - who cares about them ?
Steve, I may be missing something here, and would appreciate if you could elaborate more on the value of the $500k stock repurchase to the long term investor.
Vadim. |
