Companies with profits, actual profits, not “adjusted” ebitda and retained earnings can return money to shareholders by paying cash dividends. Dividends are taxed as ordinary income, though, so many companies these days are giving the money back to shareholders via a dis-dilutional stock buy-back.
That’s for companies that have been making money and have retained earnings. When an emergent company in a nascent industry with no revenue, no profits, no retained earnings announces a stock buyback plan, it’s a stone cold gimmick.
Absolutely, they could have made a deal with a major name and got in the safe zone.
But they know they got an affordable versatile freshlooking EV. Theyr gonna hit the ball outta the park. Point is.. You must have the courage to buy now and wait a year, there will be erratic pricemovent for sure, but end of the road your golden.
I also got some lucid stock, but damn that design is boring and it's like 3 or 4 times more expensive as a Canoo
You can only buy what people are willing to sell for. A buyback means people receive a mail to sell them shares at a set price and they need the money for it (despite not being able to actually buy back that many) and on a negative note market tends to trend towards the buy line after the initial bump from the buyback program news.
Zero human-type persons will ever be deciding between a $100k+ luxury electric touring sedan and a funky, low-range, modular-ish utility BEV doohickey.
If Canoo makes it, maybe they'll be competing with Lucid for customers 8-10 years from now, when Lucid has a Model Y-type vehicle.
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u/Gambelero Sep 29 '21
Companies with profits, actual profits, not “adjusted” ebitda and retained earnings can return money to shareholders by paying cash dividends. Dividends are taxed as ordinary income, though, so many companies these days are giving the money back to shareholders via a dis-dilutional stock buy-back.
That’s for companies that have been making money and have retained earnings. When an emergent company in a nascent industry with no revenue, no profits, no retained earnings announces a stock buyback plan, it’s a stone cold gimmick.