I had another good talk with Lisa Laymon yesterday. I must say she has been more than patient with me and also very considerate. She seems to be doing a good job so far in a very tough position.
I learned a couple of things related to the buy back. I was under the mistaken impression that virtually all of the float was US ADR's traded on the Nasdaq. Instead she informed me that it was actually less than half. The rest of the float is traded on the SES. And, of course, about 1/3 is held by insiders. This reason alone would make it very difficult to buy back 9 million shares on the Nasdaq. Looks like they will have to buy a significant chunk in Singapore.
She did say that they still are only bound by Nasdaq rules. However, one of the Nasdaq restrictions is a limit of 25% of the average daily volume for the previous 30 days. This rule would normally mean that CREAF couldn't buy 9 million shares by the end of the year. However, this rule doesn't apply to block trades, which are at least 5 or 10K, not sure exactly. So it really isn't a severe restriction if there are blocks available.
I asked her also whether CREAF would have to cease buy back during their "quiet" period and she didn't have the answer but was going to ask the CFO, who is handling the buy back on a daily basis. She said she would let me know soon. This is a concern since CREAF's next quiet period should start about Dec 18, which would cut off quite a few days of what's left for this first chance. It would also mean they couldn't restart until after the next CC. I'll let you guys know when she tells me the answer.
Lisa couldn't, of course, tell me what their plans were for the buy back, how many shares and what price levels. Overall, my feeling is that they are still strongly committed to the buy back, but I doubt now that they will get 9 million shares by the end of the year, just because of the transaction problems, unless they find a big holder who wants to sell. Thing is, CREAF is still 5 bucks below the start of the year and is still a candidate for tax loss selling. Maybe they are counting on that to free up some cheap shares.
Dennis |
