08-21-2013, 08:33 PM
If you look at IOC you see the following picture:
Regular funds etc: 42 M
Shorters: -12
Freefloat 20
Total 50
Because of the shorting the freefloat increased by 12 M. A sharebuyback reducing the free float would be the most effective way to fight the shorts. A side effect of the share buyback would be the leverage effect. By reducing the sharecount, the sharevalue increases.
Let us assume a share buyback amounting to 10 M shares which costs at this moment 660 M. Company value after deal 10 B. This would imply an increase in sharevalue from 200 to 250 USD.
Regular funds etc: 42 M
Shorters: -12
Freefloat 20
Total 50
Because of the shorting the freefloat increased by 12 M. A sharebuyback reducing the free float would be the most effective way to fight the shorts. A side effect of the share buyback would be the leverage effect. By reducing the sharecount, the sharevalue increases.
Let us assume a share buyback amounting to 10 M shares which costs at this moment 660 M. Company value after deal 10 B. This would imply an increase in sharevalue from 200 to 250 USD.
