Share buy-back

Reading the discussion about the Company’s share buy-back on the Bankier forum it feels a little bit like in a Czech film. Share buy-backs tend to be viewed positively by markets as they can be interpreted as management’s view of the relation between share price and value. Share buy-backs introduce additional demand for the shares in the market.


What is more surprising is the often-repeated view that the Company and its management are somehow interested in and manage to push the share price down to buy back shares cheaper. The reality is that the share buy-back has been initiated for clearly communicated reasons and its execution has been outsourced to a broker, which executes trades without management’s involvement. The design and execution have been designed in line with all applicable regulations. The Company is under the supervision of the Dutch regulator AFM and all trades of the Company and its insiders are reportable. Equally importantly, however, the motive and means are missing.


The two board members are significant shareholders and thus unlikely to be interested in a low share price. As board members the mandate is to increase the Company’s value, which should be reflected in the share price over time. How would the Company’s management engineer a lower share price, being a strictly supervised entity on a regulated market, and to what end?


We focus on value creation and both our progress in the Romanian market as well as the success in the Polish capacity auction for 2024 (both reported earlier this week) are major milestones in that effort, and in my humble view, would be deserving of more attention in the forum. 


In short, value is what management can influence, not the share price.