The reduction in the number of outstanding shares can result in the stock of a company going one way or another but unfortunately for Asia Broadband Inc (OTCMKTS:AABB), it had a negative effect on its stock.
Yesterday, the company announced that its board of directors and the higher management concluded the retirement of as many as 120 million restricted common shares. The shares were retired to the treasury. It is a significant development for the company, considering the fact that Asia Broadband retired 13 million extra outstanding shares in the company than had been announced previously in May this year. However, in this regard, it is perhaps important to point out that the company expects to retire more shares in the future.
It is a part of Asia Broadband’s initiative to unlock more value for its shareholders. When the number of outstanding shares gets lower then it usually leads to a spike since the shares become rarer. However, the company’s actual shareholders were not particularly thrilled with this move from Asia Broadband, and the stock actually tanked by as much as 10% yesterday.
It is not going to be interesting to see if the stock can actually make a recovery over the coming days. Asia Broadband also noted that later on this week it is going to be able to provide an update with regards to the progress that has been made in the development of its cryptocurrency exchange project. It is one of the more ambitious projects at Asia Broadband at this point.