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Thank you for your great information about it in the weekend email. Last year, it offers $2.63 for its common stocks, but the management suggest people to accept it but they didn’t give up their shares (Almost similar time, I saw news from another company has similar case, and the management did give up all their shares after the deadline). In last November, it also announced NCIB. And as you mentioned in the email, the CEO and CM did make some big shares purchases. You mentioned that “what the company is going to do moving forward to get out of its rut.” Could you please provide more detail thoughts about the management possible incentives: squeezing out more floating shares before privatizing the company, accumulating more shares before selling the company, enjoying the cash salary and benefits as management, or simply too dumb to “get out of its rut”, etc.?

Thank you

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Asked on March 21, 2024 4:36 pm
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Hey there. Just for clarification, are you asking what the incentive would be for them to make the share purchases?

In this situation, there are a multitude of reasonings for it. For one, they could be simply buying the shares as they believe the stock is undervalued. Secondly, they could be buying the shares to instill investor confidence. A lot of management already has skin in the game, so they benefit from keeping the share price elevated as they already have holdings typically. So, buying shares can be in an attempt to calm the shareholder base down and hold the stocks value.

Another prime example of this would be the large insider purchases made by Algonquin Power management after the dividend cut. We saw retail investors go crazy after this purchase because they thought management was buying because they believed the stock to be undervalued. Looking back now, it did look like it was an attempt to increase investor confidence.

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Posted by Dan Kent
Answered on March 22, 2024 8:16 am
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