Matthews South advised a large-cap technology company on its first Enhanced Open Market Repurchase (“eOMR”). The eOMR is an open market program intended to maximize the discount to VWAP. The program does this by using an algorithm to determine the daily purchases. Matthews ... >>>Read More
COVID-19 and Share Repurchase Suspensions
In a previous post, we analyzed the trend of drawing down on credit facilities to enhance liquidity during the COVID-19 crisis. In a similar theme, many companies are also reconsidering their capital return programs. We quantified the number of companies that have announced the ... >>>Read More
Share Repurchase Strategies for Volatile Markets
Over the past three weeks, the VIX index (a measure of expected volatility of the US market over a 30-day forward looking period) has steadily increased from the mid teens to a maximum of 82.7% on 16-Mar-2020. To put this in perspective, the VIX index peaked at 80.9% during the 2008 financial ... >>>Read More
A better way to assess OMR broker performance
Companies in the S&P 500 alone spent $770 billion in the past four quarters on share repurchase. The majority of this buyback was executed through open market repurchases (“OMR”), including 10b5-1 plans. In OMR programs, the broker, as an agent of the company, executes the ... >>>Read More
Should ASRs have the “Lookback” Termination Feature?
In a variable maturity ASR, the bank has the right to terminate the ASR on any date that occurs between the specified first acceleration and final termination dates. In return for having this valuable optionality, the bank agrees to provide the issuer with a guaranteed discount to VWAP. Most ... >>>Read More