Originally Posted by
gloopy
Welcome to the club.
One day we will all regret the short sighted decisions to whiz away billions for absolutely zero return/long term/company gain. When it rains it pours, and it will rain again.
If I was mgmt and I knew the long term prospects of the company were good, the market was undervaluing my stock, and i had a glut of cash I wanted to put to use...I would forego using the cash for recapitalization provided my current assets could get the job done, undergo a massive buyback until my stock was fairly or overvalued, then release those treasury shares when I want to recapitalize my fleet and my stock price has essentially doubled or more. The stock has almost doubled off the low a couple months back...all those buyback shares have proven to be a wise decision at this point in time. If the shares are retired, stockholders win because of a negative dilution effect. If those shares are reissued at higher prices the company is better off, and the stockholders may also be as well depending on the ROI of the treasury share value. If they are reissued at lower prices than the buyback price, the company and stockholders all lose.
It remains to be seen what ultimately happens with this glut of buyback cash that has been used, but it's possible we all may win from it.