No. of Recommendations: 1
" Let's imagine you think a share is actually worth 1.6 times book value these days, so $100bn buyback at 1.3 times book would purchase $123bn in value for $100bn in cash, adding $23bn to the total value of Berkshire.
Shareholders' equity is $649bn, so at 1.6 we're assuming the firm is worth $1039bn before the transaction. An increase $23bn is therefore an increase of only 2.2% in total value. Around 11.8% fewer shares outstanding, so value per share would rise by about 15.9%."
I love ya brother, BUT, sometimes I really think you are Buffett playing with us all these years. I'm talking IV, NOT, BV, how accretive to IV would a huge buyback be, tho these days, brk might be trading above IV. It might be too late now, but a few years ago, IF, brkb was trading at a 20 percent discount to IV what would a huge buyback have done?
Buffett understands the importance of fees and expenses yet be bought and promoted IBM knowing the insiders of ibm were taking 2 percent or more of the company in options, pay, etc, while missing quarter after quarter for years. As you well know, I bashed that move in real time, and received much love from the usual suspects in brkville. Thank you.
