Urbana Corp has been one of the first write-up’s on my blog. I initiated my position almost a year ago, and the thesis was simple: it’s a crappy closed-end fund, but it’s trading at a big discount and it has a buyback program in place that should easily generate more value than what’s disappearing due to management costs, trading costs and other expenses.
While Urbana announced a new share repurchase program at the end of Augustus it seems to me that it has stopped buying back shares after just a few weeks. Today the company has exactly 70,000,000 shares outstanding (10,000,000 common shares and 60,000,000 non-voting shares). The share count has remained at this level for the past few weeks, and while the repurchase program was paused in the past it’s a suspiciously round number. Combine this with the statement below from the CEO (made last year):
We do plan to build this company and our goal is significantly above its current size. I would not like to run our size down too much.
And it seems to me that the company has reached the number of shares they are willing to repurchase. Given the fact that a big part of my thesis was based on the value created by the buybacks it seemed like a good idea to reconsider my position in the company. Unfortunately the discount to NAV is back at the level of when I bought my position (~45%), and in the mean time NAV/share has been going down even though the company did reduce the share count from 75.5M to 70.0M. The result: a loss of approximately 9.1 percent.
No position in URB-A.TO anymore