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Xinyuan Real Estate Co., Ltd. Message Board

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  • caseysxyz caseysxyz Sep 24, 2012 9:10 AM Flag

    When will our one time special dividend be declared?

    I think I get the math. Earnings stay the same shares go down share price goes up.

    Does that only work if the only force on valuation is supply and demand of shares? Does not risk get baked into the valuation? Is is possible the market's assessment of risk might influence price more than the interaction of supply and demand.

    In the interest of transparency, I believe supporting a buyback has shortish qualities too.

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    • The dangers of Share Re-Purchase have recently become much greater, in light of the new "Going Private (Publicly)" method has been developed and used on CMED(q) and ZSTN. Both those companies completed RePurchases about 10 seconds before the going private attack was launched. That's no coincidence.

      Share RePurchase is a perfect prologue to taking a company private. It allows the would-be buyers to use the company's own money to reduce the total amount of shares remaining outstanding (also known as the total amount of shares they'll need to buy out of their own pockets before owning the company). From the point of view of the buyers, the fewer shares left in the float, the better.

    • Yes casey. The fewer shares, the higher the quarterly earnings per share goes up. The value of each share goes up as well.

      Again, yes the risk can keep the share price down as well, but as long as the company keeps buying shares back, while the stock price is low, the higher the share price can go when the company does get credibility.

      When Chinese stocks, and/or XIN get credibility, there will be fewer shares, making the supply and demand concept mean more.

      Sentiment: Strong Buy

 
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