1. What’s Happening with LTC’s Share Buyback?
On August 21, 2025, LTC announced its decision to buy back 300,000 shares, approximately 2.99% of its market capitalization, worth about 3.3 billion won. The buyback is scheduled for August 29.
2. Why the Share Buyback?
Share buybacks are generally interpreted as a move to enhance shareholder value. Reducing the number of outstanding shares increases earnings per share (EPS) and book value per share (BPS). Furthermore, a decrease in the number of shares circulating in the market can lead to improved supply and demand dynamics.
3. So, What About the Stock Price?
A positive short-term impact is anticipated. The share buyback announcement can positively influence investor sentiment and provide upward momentum for the stock price. However, LTC is currently facing challenges with declining profitability. Therefore, after a potential short-term rise, the stock price is likely to revert to movements based on fundamentals. In other words, the long-term stock outlook depends on LTC’s ability to improve its earnings.
4. What Should Investors Do?
- Short-term investors: Consider investment strategies that capitalize on potential short-term price volatility around the buyback date.
- Long-term investors: Continuously monitor LTC’s earnings improvements, new business performance, and macroeconomic changes before making investment decisions.
- Risk management: Manage investment risks by considering factors like exchange rate fluctuations, risks associated with convertible bonds, and uncertainties in the semiconductor industry.