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Hi Qiaofeng,
I have been puzzled by the share buy backs as well since it isn't typical of a business trust to return capital to unit-holders. In your post, you mentioned that share buy backs can increase A ie the market capitalization. But how does that work out ? Wouldn't share buy back reduce the market capitalization of the Company (assuming rationale market behaviour) since the company profit generating ability remains unchanged but its cash position would have declined slightly thereby making it less valuable than before ? Would appreciate your view in this matter.
Do agree about the Arqiva disposal. Wiped out the 2006 - 08 profits. Previous CEO rode the credit boom and failed to exit before the bust. New CEO have streamlined it to just 3 core assets. Personally, now its more of an asset owner/operator than an asset trader (their old strategy). They should increase the transparency of their underlying assets as well.
Please feel free to post contrary views here. It would be great to see different perspectives on the same company and will therefore help investors (especially those who are not vested like myself) learn more about the biz model and their prospects.
(Not Vested)
I have been puzzled by the share buy backs as well since it isn't typical of a business trust to return capital to unit-holders. In your post, you mentioned that share buy backs can increase A ie the market capitalization. But how does that work out ? Wouldn't share buy back reduce the market capitalization of the Company (assuming rationale market behaviour) since the company profit generating ability remains unchanged but its cash position would have declined slightly thereby making it less valuable than before ? Would appreciate your view in this matter.
Do agree about the Arqiva disposal. Wiped out the 2006 - 08 profits. Previous CEO rode the credit boom and failed to exit before the bust. New CEO have streamlined it to just 3 core assets. Personally, now its more of an asset owner/operator than an asset trader (their old strategy). They should increase the transparency of their underlying assets as well.
Please feel free to post contrary views here. It would be great to see different perspectives on the same company and will therefore help investors (especially those who are not vested like myself) learn more about the biz model and their prospects.
(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.