Stelco Holdings Inc., is bolstering its stock price by offering to buy back almost half of its shares. On Thursday, the company said in a release, the move is a “prudent use” of its financial resources given its assets, including a “substantial level of cash on hand” and the current price of the shares.
Buying back a substantial amount of stock isn’t a strong move for any company in general, said Peter Warrian, senior research fellow at the Munk School of Global Affairs and Public Policy at the University of Toronto. Stelco’s revenue increased by 13 per cent in the second quarter of 2022 for an operating income of $440 million. Its shares closed at $34.76 on Thursday.ArcelorMittal S.A. is a bigger beast than Stelco. It’s the second largest steel producer in the world and was formed in 2006 from the takeover and merger of Arcelor by Indian-owned Mittal Steel. At the time of the merger, Arcelor was the world’s largest steel producer.Stelco, is offering to buy back shares.
“Arcelor has a significant technology advantage over Stelco,” he said, due to the company’s financial resources and European technological advancements in renewable energy.