In recent years, more and more listed companies have begun to play "combination punches" - on the one hand, they repurchase shares in a high-profile manner and show confidence; on the other hand, they start equity incentives and bind the core team; at the same time, they may also cooperate with operations such as reduction of holdings, fixed increase, and mergers and acquisitions, with frequent actions and tight rhythm. However, whether this punch is a stroke of genius, or a backlash and self-mutilation, the scene of slapping the face is often between a detail.
Today, Goheal will take you to dismantle the real logic behind this set of "capital operation combination punches": which ones are precise efforts and which ones are just "performance art"? More importantly, how can companies fight a beautiful battle without slapping their faces?
American Goheal M&A Group
Stock price is sluggish? Let's start with a repurchase "comfort punch"
"The company is seriously undervalued" and "full of confidence in the future" - whenever the market falls into adjustment, listed companies will always use these words in the announcement to start a share repurchase.
On the surface, this is a "self-enhancement" operation at the capital level: releasing positive signals, boosting investor confidence, and stabilizing secondary market stock prices. In fact, for many companies, this is more like a "self-salvation": preventing the stock price from further falling below the fixed increase price, the equity incentive exercise price, and even keeping the actual controller's pledge safety line.
But the reality is cruel and distressing.
A star technology stock announced a repurchase of 1 billion yuan at the beginning of the year. The stock price jumped 5% on the same day, and investors were excited. However, six months later, only one-third of the repurchase was completed, and the stock price had fallen below the average repurchase price-this punch was about feelings, but the ending was a mess.
Goheal repeatedly reminded customers: The capital market is not about feelings, but about calculations. Repurchase is a "delaying tactic", not a long-term strategy. If you want to really "rise", the logic must stand, the performance must be able to support it, and the narrative must be able to fight.
Equity incentives: a carrot in one hand and a crutch in the other
Compared with the gentle punch of "repurchase", equity incentives are a more straightforward "whipping punch". The purpose is clear, which is to bind the core backbone and mobilize enthusiasm.
But when it comes to incentives, if you are not careful, you end up with "drawing too big a pie and opening your mouth too small".
Some companies set super-high exercise prices to encourage the team to achieve performance; some companies do the opposite and set extremely low thresholds just to cash in early. The most eye-catching thing is the fancy combination of "incentives while reducing holdings", which makes people wonder whether this is "creating the future together" or "cashing out and running away".
When Goheal assisted a new energy company in designing an equity incentive plan, he emphasized three principles: "Goals must be achievable, constraints must be feasible, and the pace must be controllable." In short, don't draw big pie, and don't do routines that will collapse your personality. Incentives are a profound human management science, and you can't sacrifice the long-term trust of the team in order to stimulate short-term stock prices.
More importantly, the issuance of incentives cannot be "scattered", but must focus on core positions. Otherwise, after a round of incentives, the team will not retain many people, but the people will be angry first.
Buyback + incentives = "hedge operation" of capital operation?
Interestingly, in recent years, many listed companies have begun to perform a "buyback + incentive" duet: first repurchase shares in a big way, and then use the repurchased shares for equity incentives, killing two birds with one stone.
It sounds perfect, but Goheal reminds: the hidden "pricing risk" and "moral risk" here should not be underestimated.
For example, the stock price of a listed company fell to 10 yuan, and the company announced a share repurchase, which the market considered to be the "floor price"; a few months later, these shares were rewarded to employees at 6 yuan - investors were furious when they saw it: Does the management know how to buy low better than us?
The original intention was to motivate, but it turned into harm, and ultimately affected the company's image and governance ecology.
More extreme is that some "financial masters" even turned repurchases into invisible blood transfusion channels: through "repurchase + cancellation + refinancing", they quietly realized the transfer of net assets. On the surface, it seems that the management and the market are advancing and retreating together; in fact, some people are playing capital "drift" behind the scenes.
Therefore, when you see a company repurchase and incentivize, incentivize and reduce holdings, reduce holdings and then repurchase, you must open your eyes. This is not "stable style", but may be a "routine cycle".
So, what is a real "no face-slapping" combination punch?
In Goheal's view, capital operation is not a flood beast, nor is it a game of gambling. It is a "lubricant" for the implementation of corporate strategy, and it is also a "regulatory valve" between market perception and corporate value.
A beautiful "combination punch" should have at least the following three characteristics:
First, the time rhythm is reasonable, and long-termism is the core. The iron must be hard, and capital operation should not be a sudden emergency measure, but should serve the company's three-year and five-year development blueprint. For example, a pharmaceutical listed company has achieved equity optimization, governance structure upgrade and R&D strategy realization through the three-step "fixed increase + repurchase + employee stock ownership plan". After a set of actions, not only has the market value doubled, but the team has also truly achieved co-creation and sharing.
Second, while telling a good story, also provide evidence. Capital operation is not just about telling stories, but also about "counting" sincerity. At a time when information transparency is increasing, trust cannot be supported by PPT and announcement language alone. Truly smart companies will use "hard currency" such as business data, external cooperation, and regulatory compliance to support their capital actions.
Third, avoid over-packaging and be wary of "embroidered pillows". There is no shortage of operating plans packaged by "financial engineers" on the market, which look beautiful but are actually fragile. A TMT company was questioned by the Shenzhen Stock Exchange for implementing incentives, repurchases, and reductions for five consecutive years, and its performance was seriously deviated from the incentive target, and its stock price plummeted.
Capital combination punches are not PR shows, nor are they shortcuts to wealth. Its underlying logic should be "returning to the essence of business."
Finally, don't let capital operations become self-entertainment
On the stage of the capital market, all actions will eventually escape the four words "value discovery".
Can repurchases convey confidence? Can incentives drive organizations? Can capital combination punches boost strategies? The answers to these questions are not in announcements, but in future annual reports; not in slogans, but in actual valuations and dividends.
We understand that when facing the capital market, enterprises need packaging, rhythm, and strategy. But more importantly, capital operation cannot be operated in a "self-entertainment" manner, and "performance sense" cannot be regarded as "practical ability".
Goheal has always emphasized that "capital operation is an auxiliary means for the implementation of strategy, not the purpose itself." Therefore, when serving customers, we are more concerned about whether the medium- and long-term value of the enterprise can support the use of capital tools, rather than the stock price K-line chart after a certain announcement.
Goheal Group
So the question is:
Is the listed company you are concerned about playing a "combination punch" or playing "twisting rope"? Does its incentive plan really motivate the core backbone? Does its repurchase support the maximization of shareholder value?
These questions may be what we should really think about.
Welcome to discuss in the message area to see if there are any "beautiful" capital operation cases around you? Or those negative examples that hit the face with one punch? Goheal looks forward to in-depth exchanges with you.
[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions. It has deep roots in the three core business areas of acquisition of controlling rights of listed companies, mergers and acquisitions of listed companies, and capital operations of listed companies. With its profound professional strength and rich experience, it provides companies with full life cycle services from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and achieve long-term benefit growth.
