Silverlake

Hi Alex,

When it comes to share buybacks, U.S. companies tend to engage in them more frequently due to the tax imposed on dividends. As a result, they are more incentivised to return capital through buybacks. Additionally, most U.S. company owners hold relatively small ownership stakes, so while buybacks slightly increase their shareholding, their overall percentage stake remains modest.

In contrast, the situation in Asia is quite different. Dividends are generally tax-free, and many company owners hold significant stakes—often more than 50%. Take Silverlake, for example: the company has a track record of paying consistent dividends. However, during the COVID-19 period, despite delivering strong results, the owner chose to suspend dividend payments and initiated share buybacks instead—despite already owning more than 70% of the company. This move allowed the owner to increase his ownership further at a low valuation.