TLT - Tilt Renewables

[sb9]

So...if u own 1000 shares at $3.10....iy costed you $3100.

1000 shares... cancelled 200 shares.

They pay 200 shares....@2.91...$582

Current holding will be 800 shares @3.10 that will be $2480

Total $2480 plus $582 = $3062....u paid $3100 for it....

So current SP is not a buy.....

That's one way to looks at it, however in the long term EPS will be lot higher as they would've reduced no of shares outstanding by about 20%. Hence the buy back is most effective tool to add value to shareholder return.

[DazRaz]

That is my view of it. The relative value of the remaining shares go up. Whether the market recognizes that is a different matter.

[winner69]

So...if u own 1000 shares at $3.10....iy costed you $3100.

1000 shares... cancelled 200 shares.

They pay 200 shares....@2.91...$582

Current holding will be 800 shares @3.10 that will be $2480

Total $2480 plus $582 = $3062....u paid $3100 for it....

So current SP is not a buy.....

With the ‘current’ mentioned i can now see what you were getting at

Share price might be $3.50 soon.

[King1212]

How ...master winner....I still try to make sense of it...

[turnip]

If TLT simply cancelled 1 share in 5 and paid you nothing, would you be worse off?

[turnip]

Buying back 1 in 5 shares at $2.91 has the same outcome as paying a $0.582 per share tax-free dividend, followed by a 4 for 5 share consolidation. So if the share price just before the buyback was $3.10, then ex-dividend it should reduce to $2.518, but then the consolidation should increase it to $3.1475. Is this right?

One disadvantage is those of us who want to maintain our investment in TLT at athe same level will have to reinvest the proceeds of the buyback, incuring brokerage costs. Another is that TLT will have to pay brokers and underwriters when it asks for the cash back to fund more projects in the future.

[King1212]

Nahh.....say u paid $3 per share. Then the buy back $2.91...then u are losing 9c....your 5 shares then reduced to 4 shares at $3....

[mfd]

Nahh.....say u paid $3 per share. Then the buy back $2.91...then u are losing 9c....your 5 shares then reduced to 4 shares at $3....

You still own part of the company - this is all zero sum stuff. You think you're losing 9c, but you're also the person gaining the 9c through your ownership of the company.

Taken to the extreme, if they paid zero for the shares you still lose nothing, your existing shares just become worth more. Same as a share consolidation/split.

[turnip]

Nahh.....say u paid $3 per share. Then the buy back $2.91...then u are losing 9c....your 5 shares then reduced to 4 shares at $3....

If they bought back 1 share in 5 at $0 per share, do you think you would lose $3.10 for every 5 shares? No, that would just be a straight share consolidation, companies do that all the time, it has no effect on the value of your investment because the 4 shares you are left with represent the same proportion of the company that the original 5 did. They could set the buyback price at $1.00 per share or $5.00 per share and you wouldn't lose or gain anything from it, other than perhaps the costs associated with reinvesting the proceeds.

[King1212]

No way....

Okay.....this is my understanding....

If someone bought 1000 shares at @$3 then it costed $3000.

Now ....1 share every 5 shares you own will be bought back....

So 1000 shares ..200 shares will be bought back at $2.91...u get paid $582

Remaining you only own 800 shares left....@$3....so...$2400 worth of shares left

I dont think after the bought back...I still own 1000 shares.... otherwise the market will be shoot up to $4 per share now

So total investment $2400 plus $582..paid from bought back ..total investment will be $2982....

So... basically u lose $18.....yes...the shares will be less on the register....but the higher SP u paid....the more u loss...on the bought back....

Then your original paid $3000 for 1000shares...becom 800 shares...that means 1 share worth $3.75 after the bought back. But the market is trading at $3.19

Happy to be corrected ....that my understanding