CBA Florida Inc. (fka CBAI)

[MadBrewer]

Perhaps a refresher for some seem yet confused;

a share buyback while running a deficit can be "deemed" illegal. It also doesn't make sense

Because it makes better sense to buy a company's interest while running a deficit.

We would have to borrow money to buy back shares,

Dilution is just another form of borrowing,
you are borrowing from the shareholders,

which would cost more with interest and discounts, than the shares themselves

Business 103;
A company buying back shares is viewed as a negative for,
the pps increases because investors view a buy back as a sign of prosperity ie;
that a company is doing well also,
buybacks may also be used to signal and/or take advantage of undervaluation. If a firm's manager believes his/her firm's stock is currently trading below its intrinsic value he/she may consider repurchases.
In layman's terms;
if a company buy's back shares @ 20 & the pps increases to 30,
the company looses money because the pps increased from where they bought at.

so it actually leads to more dilution

because there are less shares on the open market.
It's by far better to just increase the a/s & dilute them while running a deficit,
then to have less of what more people want

Let's wait until we are "ALMOST"
profitable and we will then consider all options like this

For more about the negatives about company buybacks;
http://en.wikipedia.org/wiki/Share_repurchase

I hope for indebt2 & others,
I've addressed your concerns.

We have gone over this question many time,

I just wanted to refresh those who may not
have yet understood the negatives of companies stock buyback.

In CBAI's case,
the more growth we have, the lower the pps so,
a stock buyback & retirement of said shares would,
devastate the pps.

Just so I have taken anything out of context;

We have gone over this question many time, here is Mr. Schissler to it.


Quote:
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Matt Schissler ?2. Also, a share buyback while running a deficit can be deemed illegal. It also doesn't make sense. We would have to borrow money to buy back shares, which would cost more with interest and discounts, than the shares themselves, so it actually leads to more dilution, not less. Let's wait until we are profitable and we will then consider all options like this

Cheers