This exercise is to test out the theory of the risk on the buybacks...

** note: Share buyback is noble and by itself, does benefit shareholders. Googleable. Pls do search and read **

Yes, what if the buybacks is done wrongly? Or even abused?



See we understand and know that TopGlove has bought a shit load of shares. Day in day out buyback, continuously for so many days already...
So it would be good that we tabulate out the number of shares they bought and the monetary value of the shares it bought....

Share buyback is nothing but buying shares. Examining Top Glove style of buying shares, if it good, we could learn from it, yes?
We could also see the buybacks from the theory of Dollar Average Cost buying? Does such buying really work?

But if the way of TopGlove buyback is bad, hey don't you think it is hell of a great idea to learn from TopGlove mistake? Yup, learning from our mistake is always the best but learning from other people's mistake(s) is heck a lot better. (some famous bugger did say this, yes?)

Notes:

1. Table track buybacks since 9th Sep.
2. TopGlove did have existing Treasury shares, which was then credited with bonus shares arising from the recent bonus issue. Hence, the total shares purchased WILL be different than the total of Treasury shares.
3. I am human. I could make mistake. Do verify the numbers and yes, if could, do inform me and I will correct.



Total number shares bought during this period.... 158,036,900
Sum paid for these shares = RM1,147,288,926.33

Average price for these shares is ... 7.259627

Closing price of Top Glove on 27 Nov = 6.99

Marked to market, the total market value of these shares bought back is 1,1204,677,931.00

Current marked to market prices losses is 42,610,988.33

extended profit/loss calculations based on various assumed prices... see post #22


*** table will be updated once a week ***
*** link to the updated post will be edited into this posting ***

Link to updated table for week ending 4 Dec 2020 - post #32
Link to updated table for week ending 4 Dec 2020 - post #87

This post has been edited by Boon3: Dec 18 2020, 07:53 PM

I have questioned Top Glove style of buyback.

This is because the prudent way or ideal way to buyback is to either....

1. Prevent the share from falling drastically (esp on days when there is intense selling pressure)
2. Buying based on the theory of 'value'

Or the simplistic buyback when the share is falling and do NOTHING when the share is rising.

Doing NOTHING when the share price is going up is most important.

On the 26th Nov, see the daily chart below



The share price rose significantly that day, yes?

But Top Glove splashed out 9.978 million on buyback that day.
Min price was 6.90.
Max price was 6.92.
Source: https://www.bursamalaysia.com/market_inform...?ann_id=3108687



Is this a smart way to buy shares?

Or is this a reckless way to buy shares?


11 Sep.. this day was way too drastic!!

The trading detail of Top Glove on that day..
Open price 6.45
high 8.03
Close 7.76
That was a great day for Top Glove shares.
On that day, Top Glove bought back 13,420,000 shares valued at 99.972 million.
Price range of the buyback = 6.2 to 8.00

Source: https://www.bursamalaysia.com/market_inform...?ann_id=3087742



Is there a reason why Top Glove share buyback to be so aggressive that the price bought back ranged from 6.20 to 8.00?

Well? Top Glove goreng the hell out of their shares that day!! That's the only way I can describe it.

based on simple examples such as this, my view is that Top Glove is way too aggressive and reckless with their buybacks....


So far... 1.147 billion has been splashed on buybacks.

If the intention was to reward the shareholders with Treasury shares, I am sure some would just want the cash than to see the company doing such buybacks,


This post has been edited by Boon3: Nov 28 2020, 09:27 AM

Good stuff
Under current fiscal conditions SBB is a no brainer good deal provided the company have sufficient cash and fundaments remains strong

Good for owners and management, bigger bonus if share price is good
Good for company, source of financing and good reputation to investors and shareholders
Good for investors, can hold for long & reasonable return
Good use of cash, minimize inflation loss and leverage on low interest financing

Tq. Do see amended second post.

Yes, technically I am for buybacks, without a doubt, which is common knowledge in investing.

However, the point is, what if buybacks are done wrongly or abused?

this posting explores that issue........

SBB is a channel for controlling shareholders to cash out at market price without impacting market price.

This post has been edited by icemanfx: Nov 28 2020, 10:16 AM

My theory is TopGlove is very confident about its cash position and is very likely to report estimates beat on quarterly profit in the next few weeks.

The market expectation for Top Glove's 2021 net profit to be between 10 billion to 12.5 billion.

Everyone is expecting a boom boom pow time for Top Glove in 2021. This is probably undisputed.

This post has been edited by Boon3: Nov 28 2020, 10:46 AM

The Bond issue

When there is aggressive share buyback, as an outsider or a minority shareholder, we need to examine if such reckless buybacks benefits the minority or the insiders?

That's logical to ask, logical to know right?

Or should we be the other people's money who are ever willing to be taken advantage of?

The 911 insane buyback...

On the 14th, there was this announcement...

https://www.bursamalaysia.com/market_inform...?ann_id=3087833



Back in 2019, TopGlove raised money via exchangeable bond....

https://www.theedgemarkets.com/article/top-...hangeable-bonds

Quote: “The bonds may be exchanged into new Top Glove shares at the option of the bondholders during the exchange period. The initial exchange ratio shall be 656.0767 Top Glove shares per US$1,000 in principal amount of the bonds

So 2,005,073 new shares listed.
Their cost price is 2.03 !!!!!

And just a couple days earlier, Top Glove on 9/11 splashed 99.972 million buying back (or in my opinion, goreng up their shares from 6.20 to 8.00

The exchangeable bond which were converted into shares were listed on 15th Sep.
Top Glove shares closed at 8.58 the previous day.
That should be worth more than 17 million ringgit.
The cost is about 4 million

A cool 13 million profit for the bond holders ....

WOW!

Exactly.

Edit:

And since then, there were many more conversion of shares!!!!

https://www.bursamalaysia.com/market_inform...=&dt_ht=&dt_lt=

Do go take a peep

This post has been edited by Boon3: Nov 28 2020, 10:57 AM

As these profit is widely expected, almost certain is priced in current share price.

on sbb kept at treasury; topg could either pledge to i.b for more cash for further sbb, cancel these shares or unload to the market. it will be interesting to see what topg will do with these sbb kept at treasury.

These call option bond holders were lucky. whether share price was pushed up to benefit these bond holders is another story.

given elevated asp and topg share price is unlikely to last beyond 2021, it is prudent to take money off the table.

This post has been edited by icemanfx: Nov 28 2020, 11:01 AM

The ESOS issue...

You know, when the company is going to embark on billion dollar buybacks scheme, the management and the Boss should know damn well that there should be no selling of shares or what not.... why risk the market questioning the integrity of the company? Right? 101 basic.

https://www.bursamalaysia.com/market_inform...=&dt_ht=&dt_lt=

There was countless listing of ESOS since Sep 2020... ESOS which are dirt cheap...

And the problem is, at it is, there is no way we know exactly if all ESOS shares were exercised and then sold for thousands or millions in profit.

Insiders selling...

this one .... https://www.bursamalaysia.com/market_inform...?ann_id=3101328

the remarks in that announcement ....



and the disposal price is 8.98.

Nice one Mr. Lim Cheng Guan ....


That certainly did not help. Not when you are a Lim. People will start asking .....

This post has been edited by Boon3: Nov 28 2020, 11:04 AM

Share price is paper or syok sendiri value; unless cashed out, can't use it to buy g650/global7500, lurssen 150m, penthouse adjacent to central park and hyde park, etc. it is sensible and prudent for shareholders to liquidate at elevated price.

it is normal and popular for major players to have multiple nominee accounts. only retailers expect to trade in own name.

if retailers could cash out for profit, so could major players; it is a fair game.

This post has been edited by icemanfx: Nov 28 2020, 11:27 AM

More on the bonds being exchanged into Top Glove shares.

Because of the recent bonus issue, these bonds are granted bonus shares too...

Source



Max scenario of the bond conversion is 20.249 million new shares...

Are the bond holders converting and then selling their shares?

That is the money ball question that needs to be answered.

This bond was issued in 2019; these bond holders were lucky and blessed like those bought and kept shares from that time.

This post has been edited by icemanfx: Nov 28 2020, 04:38 PM

Why didnt share all these in the stock discussion forum?

Sharing there can have a more discussions ma

Cause I want to keep track of this posting.

Okay?

And yea..one can easily ignore this posting if they no likey.

I ought to believe that they are doing SBB to buyout the proxies' holding.

I have been hearing this lately

Care to share the details...
Heard about this too 🙏

If u know...