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@ TTTI:
IF, and that's a big IF, the management are doing SBB, using company's money of course, then issuing options, exercising and immediately selling it off, how can a shareholder view this as a positive?
*In the case where SBB is done at a good discount to NAV, it is better than SBB done above NAV for and eventual ESOS payout. Since we all know when times are good, the mgt. of this company (and many other listco) WILL REWARD themselves with ESOS at some point, so its much better they do the SBB at a lower than higher stock price.
Maybe you can try to time it such that you ride on the rising share price and if you're lucky, get out together or before them. I would be more cautious about any long term position.
** Yep that is my intention. But no need to time, for sure the SBB will be done before 4Q year end report and AGM where they will get agreement to start granting ESOS and renew SBB mandate and all the usual stuff. So no need to time much, just buy now when they are doing SBB and sell before the FEB 4Q result, anytime in JAN. The mgt. will be unable to get their ESOS until afer the 4Q result and subsequent AGM.
If you're the sole owner of the company, would you allow company funds (aka shareholders money) to be used to buy back shares, issued at below market price, with no lock in period upon vesting? Isn't this just a way of transferring funds from the company to the receipants of the options then?
** YES and YES. I would love to do it as sole owner, it will reduce float, increase my % holdings and make all the rest of employees be very happy.
I'll emphasize that from my past dd and correspondence with CDW's CFO, my impression is that the company's management is honest and open. I don't think this is what's happening here, I am just responding to the suggested scenario above. The current share BB seems to be a legit means of adding on to the treasury shares to support their past obligations (ESOS options given out)
** I emailed the CFO as well before and got prompt answer, but that alone doesn't prove anything. Lol in fact he wouldnt reveal who their major customer is with the usual excuses... "tok kok" man, if other company can reveal orderbook, why cant this company. Dun reveal order book just means lack of transparency. If i really want, as shareholder i have rights to visit the factory and find out where they shipping to and who they buying supplies from. Also look at how mgt. reward themselves the last cash fiasco then you tell me if you still think management is HONEST and OPEN.
Ultimately though, unless there are major developments like new orders won, that'd bring in real cold hard cash, it'll be hard to see this being sustained after the BBs conclude
** Correct. It may not be sustained after SBBs finish and of course stock price only be up if company starts making some good money as usual.
Go and look at 2013 /2014 which were better times for the company. back then business good and co. gave out tons of stock options. Last year business bad, no stock options and cut to dividends. My estimate from past figures is if business recovers next quarter and is good again, they have reason to give out another ~9million options with price which is around 20% discount to whatever price the stock is around late April /May next year, so they will be looking to top up somewhere near there. The recent round only 1.9m not quite there yet and they need to do it before Jan, likely there is some lock out period for SBB before a quarterly report.
which leads back to why they need to top up treasury now if they know next few years is going to be bad years and challenging. Is it just as simple as wanna top up treasury when prices are at a bottom?
Why don't you try email CFO again and ask him why they are doing SBB, see what excuse he gonna give you??? after all he will be the one in charge to authorize the funds and execute it being the CFO and knows the real reason.
IF, and that's a big IF, the management are doing SBB, using company's money of course, then issuing options, exercising and immediately selling it off, how can a shareholder view this as a positive?
*In the case where SBB is done at a good discount to NAV, it is better than SBB done above NAV for and eventual ESOS payout. Since we all know when times are good, the mgt. of this company (and many other listco) WILL REWARD themselves with ESOS at some point, so its much better they do the SBB at a lower than higher stock price.
Maybe you can try to time it such that you ride on the rising share price and if you're lucky, get out together or before them. I would be more cautious about any long term position.
** Yep that is my intention. But no need to time, for sure the SBB will be done before 4Q year end report and AGM where they will get agreement to start granting ESOS and renew SBB mandate and all the usual stuff. So no need to time much, just buy now when they are doing SBB and sell before the FEB 4Q result, anytime in JAN. The mgt. will be unable to get their ESOS until afer the 4Q result and subsequent AGM.
If you're the sole owner of the company, would you allow company funds (aka shareholders money) to be used to buy back shares, issued at below market price, with no lock in period upon vesting? Isn't this just a way of transferring funds from the company to the receipants of the options then?
** YES and YES. I would love to do it as sole owner, it will reduce float, increase my % holdings and make all the rest of employees be very happy.
I'll emphasize that from my past dd and correspondence with CDW's CFO, my impression is that the company's management is honest and open. I don't think this is what's happening here, I am just responding to the suggested scenario above. The current share BB seems to be a legit means of adding on to the treasury shares to support their past obligations (ESOS options given out)
** I emailed the CFO as well before and got prompt answer, but that alone doesn't prove anything. Lol in fact he wouldnt reveal who their major customer is with the usual excuses... "tok kok" man, if other company can reveal orderbook, why cant this company. Dun reveal order book just means lack of transparency. If i really want, as shareholder i have rights to visit the factory and find out where they shipping to and who they buying supplies from. Also look at how mgt. reward themselves the last cash fiasco then you tell me if you still think management is HONEST and OPEN.
Ultimately though, unless there are major developments like new orders won, that'd bring in real cold hard cash, it'll be hard to see this being sustained after the BBs conclude
** Correct. It may not be sustained after SBBs finish and of course stock price only be up if company starts making some good money as usual.
Go and look at 2013 /2014 which were better times for the company. back then business good and co. gave out tons of stock options. Last year business bad, no stock options and cut to dividends. My estimate from past figures is if business recovers next quarter and is good again, they have reason to give out another ~9million options with price which is around 20% discount to whatever price the stock is around late April /May next year, so they will be looking to top up somewhere near there. The recent round only 1.9m not quite there yet and they need to do it before Jan, likely there is some lock out period for SBB before a quarterly report.
which leads back to why they need to top up treasury now if they know next few years is going to be bad years and challenging. Is it just as simple as wanna top up treasury when prices are at a bottom?
Why don't you try email CFO again and ask him why they are doing SBB, see what excuse he gonna give you??? after all he will be the one in charge to authorize the funds and execute it being the CFO and knows the real reason.
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