Bravada International Ltd (BRAV)

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An interesting share buyback query response now up at Bravada.com/answers:

Q: Is the company planning a share buy back program? Since the stock seems to be very undervalued, trading at 60% of 2020 revenue. Are you planning to have a CC this year?

A: A couple things with regards to any share repurchase. A company must be a current filer to be able to make open market purchases of its stock. This is because all shareholders must be in possession of all material facts that the Board of Directors / insiders have so that shareholders may make the same determination as to the over or under evaluation of the company's shares. If the company is in possession of any potentially material facts that have not been disclosed to the public, the company must then disclose the material information or, if the disclosure cannot be made at that time, engage in any approved open market share repurchases at a time when the material information is disclosed. All market participants must make the same informed decision as to whether they would like to buy or sell the company's stock. If any share repurchase is going to occur, the company must make an announcement with regards to it and that it has authorized "X" amount for a particular time frame (1 year or a specific quarter).

The next issue is determining the ROI on any share repurchase relative to ROI of reinvestment into the company's expansion investments in such things as WorldofPets.com. Launching a website such as WorldofPets.com can be capital intensive with regards to seeding initial inventory. A determination must be made with regards to ROI on invested capital, whether it is better in a share repurchase or a new website launch. If there is not enough capital for seed inventory then the company must halt its expansion if funds are going to be funneled to a share repurchase. I cannot provide any insight into what our internal evaluations / expectations are or could be with regards to any of these matters but once we are a current filer then we can determine these things internally. One could conclude that the share price may be materially different from where it is now once everything is disclosed .... or it may not be, we shall see.

As for the CC, I have made mention of this possibility a couple of times in press releases. I leave the possibility of this open once we have all information disclosed. This new question / answer mechanism on the new Bravada.com has been working quite well as people seem quite eager to ask questions to dispel potential inaccuracies or gain clarification.

It's hard not to like that answer!

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