SPOOZ Inc (SPZI)

[snow]

shotsky "So in principle, the market cap would DROP with a buy back". I think this is a simplistic line of reasoning. In a realistic world the pps may drop, increase or rise after a buy back. The all-important factor is the price paid in the buy back. It may be very low or fairly high in relation to net assets per share or in relation to future prospects or the opposite. Normally a company will not buy back shares if it can expect that the stock market will think it is unwise to do so. Therefore in a rational world the pps will in most cases rise after a buy back. But in some cases the return on spending cash on investments can be so good that it will look foolish to spend available cash on a stock buy back instead. In such a case it might be justified if the pps because of the unwise investment decision.