BYD's 'share buy back' was a pure marketing stunt and old news
$BYD COMPANY(01211.HK$ $Tesla(TSLA.US$ $NIO Inc(NIO.US$ $XPeng(XPEV.US$ The article explains why BYD's 'share buy back' was a pure marketing stunt and was actually old news. Here is the evidences:
1. The amount was very small: less than $30M.
2. BYD talked about this already in December of last year.
3. BYD got only around $9.0B in liquid assets but sells annually 3.0M vehicles. This is very little capital given the scale of BYD's operation. For comparison, Tesla's sells 1.8M vehicles annually but sits on $29B in liquid assets.
4. BYD is in the middle of an international expansion attempt: this is always highly capital intensive as infrastructure and inventory build-up in new markets trap cash. Spending cash in share buybacks makes no sense given thin capital basis and current ambition.
Bottom line: Given the tiny size of the buyback and BYD's ongoing global expansion attempts, this buyback can clearly be classified as a clever marketing campaign.
My Take: The budget of less than $30M to buy back shares is really very very small compared to the budget set for global expansion. Also I am doubtful that the buy back will have little or no effect on the share value as the news was announced more than 3 months ago.
Source:
$BYD COMPANY(01211.HK$ $BYD Co.(BYDDF.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Tesla(TSLA.US$ $VOLKSWAGEN A G(VWAGY.US$ $NIO Inc(NIO.US$ $Li Auto(LI.US$ $XPeng(XPEV.US$ $General Motors(GM.US$ $Ford Motor(F.US$ $Rivian Automotive(RIVN.US$ $MERCEDES-BENZ GROUP AG(MBGAF.US$ $TOYOTA MOTOR CORP(TOYOF.US$ $GEELY AUTO(00175.HK$ $Stellantis NV(STLA.US$
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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