It\'s not necessary to just return the $36 m to shareholders if Best World can find clever ways to invest the money. Basically, it\'s about the return on capital. Currently, $36 m sitting in the bank earns the company a paltry interest income. But the company shouldnt just plunge into any M&A, or the money will be gone, which of course is far worse than sitting safely in the bank.
NO excusses! Best World had been holding on the huge amount of cash for too long!! The worst thing is to hold on to huge amount of cash doing nothing! I believe one of the main reason why FMs not interested in Best World is because they holding too much cash for too long without knowing what to do with them!! Assume if they can generate a 15% return from the $36m, their profit would surge by about 50%!! DO SOMETHING!!
Bestworld, If you don\'t like the fact that the Company does nothing with its 36m cash, you have a choice. Just sell your shares in the open market. I rather the management keep the cash and wait for the right opportunity then to be rush into buying something useless. Go read what happened to Yeo Hiap Seng in the 80s. Exactly the same scenario as Best World now.
Given a choice... i rather have the $36million happy problem which make it a target for corporate raiders.... As compare to a company which have $36 million of debts.... Of course, you can buy some other shares which you think have greater potential.... For myself, I am happy with what Best World is doing now.....Not forgetting it is still paying out dividend yield of about 6 - 7%.
36m is a huge sum for a small company like Best World. The fact is that they have been holding the huge sum for a long period of time doing nothing. I think Best World shareholders have the right to know the plan for deploying the cash and not just wait for the right opportunity. If you have a good business opportunity, it will not be too difficult to raise cash. So, it is not wish to keep huge amount of cash, that wouldn\'t make the company more attractive. To be a great company, the cash need to use to generate growth....or....return to shareholders for them to generate better return!!
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