Replies to post #9028 on China MediaExpress Holdings, Inc. (fka CCME)

[RidiculousTrader]

I think the share buy back should be considered off the table at this point. The company is in the midst of launching a major new business initiative. Opening 400-500 boutiques will require a decent amount of cash and I hope all of you now see why Jacky was raising this capital over the last yea. We will see a significant increase in revenues from this venture in future years, just remember that this is going to cause a decent amount of capital at the start.

The whole purpose of the share buyback was the market was pricing the stock as if it were going bankrupt, this is not the case now. I am very glad that the company stepped in and essentially told the shorts they were screwed and were willing to defend the stock if it continued trading in that sub 10 region. Fortunately though the market stepped up and caused a rather massive correction and now we have the stock trading up 100% off its lows. So the share buyback did what it was expected to do.

So don't expect to see any shares bought back... I certainly hope the company isn't buying back shares, they have much better ways to put that money to use.

[stills999]

In the long-term, buying back shares allows future dividends to be higher as the dividends paid by the company are divided over less shares outstanding.

Hypothetically, think of it another way ... wouldn't it be great if they kept buying back shares until you or I were the only owner ... we would then collect the whole dividend of the company! (This would not work as shares would go up in price such that the buyback would become too expsensive, but you get the point.)

[Nigel9527]

5%-10% of the net profit to be paid as dividend does not justify the 200M cash. It does attract institutional investors to some degree, but share buyback program can do the same. If they buy back 1M shares, they would be huge to the stock price and float!

If they are going to do a 20% net profit as dividend, that's another story. But at this step, I don't think that's the best way to allocate their money.

It is just hard to balance this out. But personally, I would like to see both happening. They claimed about the dividend and I believe they will pay. They also claimed share repurchase, I believe they will at least buy back some shares, like 500K something.

Jacky bought @ 15 so I dont see why the company would not buy @16-17 range.