Its make or break time. Everyone will get an idea what the large part of Swhc investors think of potential value. My gut says they all wait for the earnings call and company outlook before making a decision
Considering that the short position just became more damaged with the recent announcement, their added buying pressure would make any fund manager think twice about participating in the buyback. Nine ways from Sunday, swhc is undervalued by at least 30% from the $10 level.
I am starting to think that swhc is perhaps playing out some strategy to defend ops and not actually buy shares. The buyback in my honest opinion, is a waste of cash and borrowing power. The company would get more bang for the buck if they acquired some other earning assets in the gun/ammo arena.
You are trying to make a very simple decision complicated.
Every sensible shareholder will tender if the market price on the last day of the tender is below $10. If they are optimistic about the future price of the stock, then they will buy more in the market for less than $10 while they get $10 for a portion of what they already own.If the price.
If the market price is above $10 on the last day of the tender, every sensible shareholder will not tender (or will withdraw their prior tender). They will then hold all their shares if they are optimistic, or they will sell in the market for more than $10 if they are not.
You are right. I only differ with you in the timeframes. It may not be as easy as you suggest to sell then buy. My guess is there would be a gap up the morning after the tender actually takes place. That's alit of shares to take out of the float overnight. But I hear ya.