Shell Share Discussion Threads

[grupo] 15/2/2019 12:58

thanks fjg

will repost on the buyback thread

hope you do not mind

have a great weekend too

[fjgooner] 15/2/2019 12:45

On our earlier subject of buybacks in this weeks Shares Magazine.

Have a nice, sunny weekend all. :)

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Share buybacks return to the spotlight

Sony makes its debut and two US Senators call for a buyback clampdown

Japan has become more shareholder-friendly
over the past few years with companies
handing back spare cash via higher dividends.

This process has naturally extended to share
buybacks, as evidenced last week by Sony declaring
its first ever buyback.

Although Sony’s actions boosted its share price,
buybacks polarise investors for several reasons.

WHY DO COMPANIES
PURCHASE THEIR OWN SHARES?

Companies which generate cash typically reinvest
that money in their business. Any excess cash
is often returned to shareholders in the form of
dividends or share buybacks. The latter can involve
a tender offer where shareholders apply to sell
some of their holding to the company, or the
company simply buys stock in the market.

WHAT ARE THE PROS OF BUYBACKS?

Investors who hold shares outside of a tax-efficient
wrapper like an ISA would pay less tax on selling
their shares via a buyback than they would from
receiving the cash as a dividend.
UK residents on the higher-rate tax band would
pay 20% above their £11,700 annual allowance for
capital gains (i.e. selling shares at a profit) versus
32.5% above their £2,000 annual allowance for
dividends. The downside is that not everyone
wants to give up some or all of their investment
by selling.

A company announcing a share buyback
effectively becomes an active buyer in the market,
potentially pushing up the share price as long as
investors don’t all rush to flog their stock.
Cancelling stock acquired through buybacks
means that remaining shareholder should be
entitled to a bigger share of any dividends
in the future.

WHAT ARE THE CONS OF BUYBACKS?

Buying back shares for cancellation also artificially
improves earnings per share as the number of
shares in issue is reduced. Management bonuses
and stock option awards are often linked to
earnings per share – undertaking a buyback can be
an easy way to hit the target.
It is possible that companies underestimate
ways in which they can reinvest cash to improve
business efficiency longer-term. While buybacks
can reverse a falling share price, a company should
base its decisions on the strategy of the business,
not a share price. They may be better off spending
that cash internally where the longer-term benefits
could ultimately reward shareholders.

However, there is a risk that companies fail to
generate decent returns off such investment which
would be negative for shareholders.

POLITICAL PRESSURE

Tax cuts in the US have fuelled a spate of share
buybacks. Critics say firms would be better off
reinvesting the tax savings in their business as it
could help boost the economy.
Senators Chuck Schumer and Bernie
Sanders, both Democrats, last week proposed
limiting the ability of corporations to buy back
stock and suggested possible changes in the
tax treatment of investments. Historically
buybacks were discouraged by the Federal
government – until changes in 1982 when
regulations were loosened by the Securities and
Exchange Commission.

While we could debate this subject matter
across a much longer article, what truly matters for
shareholders is that companies give deep thought
to how they spend their spare cash and not simply
do buybacks because that’s in fashion or for
management’s personal gain.

By Daniel Coatsworth Editor

[grupo] 15/2/2019 12:31

Oil giants are competing to buy battery companies
By Akshat Rathi15 minutes ago

For an undisclosed sum, oil giant Shell today announced that it bought German home energy-storage startup Sonnen. This follows a $70 million investment into the firm by the oil group’s venture arm last year.

Founded in 2010, Sonnen says it has installed 40,000 battery packs in homes around the world (paywall). Since it started, the cost of these units have fallen by as much as 80%, thanks to the declining prices of lithium-ion battery manufacturing.

Shell’s acquisition boosts Sonnen’s ability to compete with the likes of Tesla, Samsung, and LG in in Europe, the US, and Australia, all markets where rooftop solar installations are increasingly popular. With a big enough battery pack to store solar power, some homes don’t have to pay for electricity at all.

Sonnen has an edge over Tesla in one crucial way. It uses lithium-iron-phosphate batteries, which are known to be cheaper and longer lasting than the nickel-cobalt-manganese batteries that Tesla uses for both electric cars and home energy-storage systems.

Regardless, the household energy-storage market hasn’t grown as fast as many expected. The upfront costs of these systems remain high, which has led Sonnen to explore alternate business models. In 2018, the company received permission from German network operator TenneT to link tens of thousands of home-battery systems as part of a “virtual power plant.” That means, in theory, Sonnen can operate a group of these batteries together like a power plant, balancing the network when there’s a surge in demand. The consumers who opt in to Sonnen’s program receive cash for the grid services their home batteries provide. The company is also experimenting with blockchain technology to manage energy trades between households.

“We’re not trying to replicate what others have done in the past—we want to offer customers what they want going forward,” Brian Davis of Shell told Green Tech Media. “In some sense, we’re trying to create the utility of the future.” Shell’s “new energy” division already acts as a kind of utility, and it could deploy Sonnen’s batteries to enhance its services.

Previously, Shell has also acquired Greenlots and New Motion, electric-car charging companies in the US and Europe, respectively. Sonnen also says that it has developed its own technology for electric-car charging, which will now become part of Shell’s growing portfolio in this area.

Though we think of oil as a commodity, it is fundamentally stored energy. In that sense, big oil companies’ interest in batteries isn’t surprising. In May last year, BP invested in StoreDot, an Israeli startup with electric-car batteries that it says can charge in less than five minutes. In 2016, Total bought battery company Saft for $1.1 billion.

[grupo] 15/2/2019 08:55

Royal Dutch Shell PLC (RDSB.LN) said Friday that it has agreed to buy Sonnen, a German company, for an undisclosed sum following an earlier investment in May.

The Anglo-Dutch oil-and-gas company said Sonnen is a global leader in smart, distributed energy sources.

Sonnen is a manufacturer of smart residential energy-storage systems.

Mark Gainsborough, executive vice president of Shell's new energies division, said: "Full ownership of Sonnen will allow us to offer more choice to customers seeking reliable, affordable and cleaner energy."



Write to Oliver Griffin at [e-mail]; @OliGGriffin



(END) Dow Jones Newswires

February 15, 2019 03:29 ET (08:29 GMT)

[sogoesit] 15/2/2019 06:50

“If global measures are introduced to limit warming, by putting a price tag on emissions and developing technology, it would curb fossil fuel prices,” Olsen said.

Really?

Have Olsen and others made progress with India and China yet?
Or are they just intent on impoverishing even more the poor in the West?

[stewart64] 14/2/2019 20:59

Imperial3...the price adjusted for XD was slightly up 2490 against (2460 +36.5). Disappointing given Brent's first firm hold on the $64s for a while.

[waldron] 14/2/2019 17:31

FTSE 100
7,197.01 +0.09%
Dow Jones
25,434.4 -0.43%
CAC 40
5,062.52 -0.23%


Brent Crude Oil NYMEX 64.38 +1.21%
Gasoline NYMEX 1.50 +2.35%
Natural Gas NYMEX 2.59 +0.47%


WTI (WTI)
- 14/02 18:04:29
54.24 USD +0.48%



Eni
14.78 -0.51%


Total
48.985 +0.15%

Engie
14.04 +0.65%

Orange
13.195 -0.34%



BP
540.9 -1.87%


Shell A
2,427 -1.12%

Shell B
2,460 -1.20%

[imperial3] 14/2/2019 10:10

Thanks florenceorbis.

[imperial3] 14/2/2019 10:00

Why the drop today?

[stewart64] 14/2/2019 07:37

Climate change lefties they should be taking legal action against themselves, all that jetting around the world for conferences and in true lefty fashion having their homes at 75 degrees plus because it's a human right.

[stewart64] 14/2/2019 07:23

Hopefully some of the 36.5p XD drop might be covered by the stronger Brent price this morning.

[sarkasm] 13/2/2019 20:41

Royal Dutch Shell RDSB HSBC Hold 2,775.00 Reiterates