September 29, 2022
Buybacks: Succinct Thoughts for Small-Caps
Small-cap investor & adviser Adam Epstein recently shared these candid & succinct thoughts about buybacks:
– If your micro- or small-cap company is unprofitable, don’t buy back your stock.
– If your micro-or small-cap company has raised outside capital in the last 18 months, or will need to in the next 18 months, don’t buy back your stock.
– If you consider your micro- or small-cap company to be a “growth” company, use any/all extra capital to…grow.
– If your micro- or small-cap company feels it has no additive use for excess capital, then perhaps you’re not actually a growth company.
– If your micro- or small-cap company feels it has no additive use for excess capital, then just give it back to shareholders directly.
Remember that we’re posting memos about the new excise tax in our “Buybacks” Practice Area.
– Liz Dunshee