TSMC (2330), the global foundry leader, suddenly announced last night that it will implement treasury stocks for the first time after 14 years of default. Since the buyback price range is between 444 and 960 yuan, it has sparked heated discussions in various stock market forums since late last night. , Some netizens asked “Is this TSMC setting a target price of 960?” This is the hottest topic in the stock market discussion today (16).
TSMC announced that it will implement treasury shares from today (16th), and it is expected to buy back 1,387 company shares, with a buyback price per share ranging from 444 to 960 yuan. TSMC stated that it is mainly due to the fact that the company’s issuance of new shares restricting employee rights will increase the number of outstanding shares. In order to offset the impact of equity dilution caused by it, treasury shares are implemented to avoid capital expansion.
However, netizens flooded yesterday, including the PTT stock market version of National Taiwan University, to discuss why the price range for buying back treasury stocks was set at 440 yuan to 960 yuan. Some netizens even thought that the key points of treasury stocks yesterday were “the target price came out”, “it was customized by the company”, “although there are only more than a thousand copies, but the declarative significance is greater than the substantive significance”, “is it true or false?” and even Some netizens divided the upper and lower limit of 444 yuan plus 960 yuan by 2, saying that the reasonable price is about 702 yuan. It is not the purpose of treasury stocks, but the pricing of treasury stocks, which has become the most concerned topic of netizens these two days.
In fact, domestic listed OTC companies have implemented the treasury stock system for many years. The repurchase method was first formulated on August 7, 1989. On November 12, 1990, Article 167-1 of the Company Law was added to buy back treasury shares. The price of repurchasing treasury shares is determined according to a formula to calculate the upper and lower ranges, rather than companies that can “call out their own target prices.”
According to Article 2, paragraph 5, of the revised “Measures for the Repurchase of the Company’s Shares by Listed OTC Companies” announced by the Financial Supervisory Commission, the company’s repurchase price should be within the average of the 10 business days or 30 business days prior to the resolution of the board of directors 150% of the closing price (whichever is higher) and 70% of the closing price on the day of the resolution of the board of directors is appropriate.
This means that during the period when TSMC decided to buy back the treasury shares, if the price falls below the lower limit of 444 yuan or the upper limit of the price range exceeds 960 yuan, the company is not allowed to buy treasury shares according to law, and must stop buying treasury shares. However, relevant regulations also stipulate that if the company re-evaluates and believes that it is still necessary to buy back, it can re-apply for treasury shares after revising the range price through the resolution of the board of directors. It also means that if TSMC really must buy back 1,387 treasury shares to reward employees, even if the price falls below or rises above the range and cannot be bought, it can still declare and buy again.
The measures for the repurchase of treasury shares of domestic listed OTC companies were formulated in 1989. The price range was originally set to avoid unreasonable prices in the set repurchase range, which would mislead investors or cause the company to fail to execute the repurchase at the set repurchase range price. The situation of the shares, but whether it is appropriate to implement it for many years, whether 70% and 150% is unreasonable, has caused foreign investors to follow the same example in the target price. (Review: Lu Junyi)
Further reading
Pursuing a strategy of competition and cooperation, major electronic foundries have raised “catfish”
-
Yahoo Finance correspondent Ye Yiru: 22 years of experience in mainstream financial media, from the bubble of Web 1.0 in 2000 to Web 3.0 of Meta, witnessing the rise and fall of large and small enterprise groups in Taiwan, and going through 5 international financial crises. I think that finance is life, and it is everywhere. No matter how difficult it is, financial knowledge should be said plainly. Whether you are old or young, you should manage your money. If you don’t manage your money, your money will ignore you.
-
Yahoo stock market app download: Instantly watch orders, price notices, latest market trends and financial news!