I almost died laughing today reading some of the posts today. Figured I'd provide some free education since some don't understand the word.
1) Geez, what a wall "someone is really trying to get out".
Wrong. No one in their right mind would sell in a block that big. It is a tactic by MM to keep the price low. It is actually a broker acting on behalf of the company. Companies typically enter into an arrangement with a broker or dealer that agrees to implement the repurchase program according to the companies’ instructions and in accordance with the requirements of Rule 10b-18. All of the major brokerage firms understand the Rule 10b-18 requirements and implement programs accordingly. However, there is also a commission incentive for brokers to buyback as many shares as cheap as possible and they will implement a tactic such as "da big asz wall" to buyback shares, 1 or 2 ticks below it.
2) Is the company diluting when they publicly announced they were going to buyback?
Absolutely not. This is illegal to the 100th degree as it violates Rule 10b-18 along with many other SEC policies. Why in the world would someone openly and publicly paint a target on themselves like that by announcing the buyback? The SEC would jail anyone involved, so its fair to assume the buyback is taking place and legally.
3) Why announce a buyback in the first place, why not just buy and then tell shareholders?
Simple, they HAVE to tell us. In order to avoid potential liability for insider trading in connection with a share repurchase program, a company should publicly disclose the program prior to its commencement. Either in a Filing or a Press Release, the share repurchase must be announced to the public, both are legally accepted.
4) Wait... what if they are not buying back shares but are actually planning on reducing the float through a reverse split?
Wtf you smoking, they clearly said they are BUYING BACK shares, read the Press release. Also, why would they even bother with a buyback if they are planning a reverse split? This makes zero sense, its one or the other. Buybacks have a positive impact on share price and also gives shareholders a bigger percentage of the company as they cancel them. Its VERY positive to go through a buyback for shareholders.
5) What about filings, don't we need to show that we are buying back shares?
Yes, the company must disclose in its next periodic filing, not necessarily individual filings. In this case, they are not required to show until Q2 fins, which would be due sometime May 15th.
6) oh wow, look at those big asz cross trades, is that dilution?
No. And those are not cross trades, those are T trades. Cross trades are illegal share swapping without recording it. T-trades are 100% legal and a tactic by MMs to purchase (or sell) shares in the open market but not reveal until the end of the day. Given statement #2, its fair to assume these are most likely Buys by MMs without showing the market that they are buying so they only reveal at the end of the day.
7) some wise guy mentioned toxic dilution, what about those?
There is NO TOXIC DILUTION. Looking at filings, you'll see only a handful of promissory notes of smaller than $50K. Most of which won't mature until months from now... and read my comment #2, the company is in a period where they can't dilute.
$VTNL
