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That would be unchanged as they have swapped cash for an asset.
A share buyback is not that.
The shares bought back get cancelled hence have no worth.
You are very much incorrect here. A quick google search and some simple maths shows you this.
https://www.board-advisory.com/compensation-committees-and-share-buybacks
Your math doesn't add up though. As can be easily seen.
You don't seem to grasp the concept.
Based on your logic, lloyds could buy all it's shares back for £29bn, and still be worth £29bn despite paying £29bn out to people to buy the shares
You seem to be conjuring money out of thin air there.
Money leaves the company to buy back the shares, that reduces the mcap.
E.g. If a cash shell company with mcap of £100m spent £50m buying back shares, it's only got £50m left so it's mcap reduces to £50m. The other £50m has gone to the people who's shares were bought.
I appreciate it's an assumption of constant mcap, and so your statement is correct based on that assumption, but how do you see the mcap being constant when assets are realised to purchase the shares? Only a sentiment shift about future potential would make that happen
Ah, so you're ignoring the caveat.
Of course how investors perceive the use of funds will impact what happens in the market,but that could be good or bad, so for discussing the theory of how something works, that needs to be excluded as it's an unknown.
So there is nothing wrong with my theoretical example is what you are actually saying?
I have a company with 1 share and an mcap of £1, so my sp is £1. I issue 1 new share for £1, so my mcap is now £2 with 2 shares in issue, so SP of £1.
Later on, I buy back that share for £1 and cancel it. So now I have an mcap of £1, with one share in issue, so SP of £1.
So everything else being equal, share issues and buybacks should have no impact on the SP at that point in time.
Future profit / loss of the company would however be distributed over more / less shares