What were you doing when you were 23? I had just started at a Big Four accounting firm where I would sometimes have the privilege of attending a client meeting for the purpose of taking notes – about all I could handle. The 23-year-olds at Indian audit firm Shah Dhandharia on the other hand were already signing off the audit of the Adani Group. Am I a slow learner or is something suspicious going on? My referees will tell you: ‘both’.

The lowdown

• 🧮 Adani may ask Big Four accounting firm to conduct a ‘general’ audit.

• 🕊️ Elon Musk says that he has saved Twitter from bankruptcy, and it is trending towards breakeven.

• 🍫 World’s biggest food group Nestle says it will continue to raise prices in 2023.

Flex your finance muscle

Note: SBC = stock-based compensation.

The mechanics of share buybacks

Something has made Bill Gurley grumpy — share buybacks.

A share buyback involves a company using its cash reserves or taking out a loan to purchase shares on the open market or through a tender offer to existing shareholders. This can increase the value of the remaining shares by reducing the number of shares outstanding and increasing earnings per share.

The merits of share buybacks schemes are debated. Warren Buffett loves them; the FT explains why to be wary of them ($). Whatever your perspective on share buybacks, stating that you are using them to specifically offset stock-based compensation is questionable. Corporate finance theory dictates that a share buyback should only be employed where a stock is considered undervalued and there are no higher ROI uses of capital available. If these conditions are not met, then share buybacks will be value destructive.

Featured Stories

EY selects Recharge Industries to revive Britishvolt

Australian battery maker Recharge Industries has been confirmed as the preferred savior of UK battery manufacturer Britishvolt ($). EY, the administrator, selected Recharge Industries as their preferred bidder for Britishvolt following the receipt of four bids, one of which was from existing investors.

Britishvolt entered administration last month, after running into financing issues while building its gigafactory — the building was to be the sixteenth biggest in the world. Boris Johnson has hailed the company as key to the green industrial revolution.

What makes this case interesting is that before being appointed administrator, EY was a longtime adviser to Britishvolt and played a central role in devising its failed strategy. The consultancy had received £500,000 per month for this work. Of course, some have suggested that this could be a conflict of interest — the worse the strategy, the better for EY?

The content we're consuming today

• WSJ on YouTube: An EV Pricing War? Behind Tesla and Ford’s Price Cut Strategies.

• The Verge: Elon Musk cleared of fraud in ‘funding secured’ trial.

• NY Times: The Blurred Lines Between Goldman CEO’s Day Job and His DJ Gig ($).

Off-balance sheet items

• The spy/weather balloon first noticed over Montana was shot down. The video is super interesting, as are the reactions of the people filming.

The bottom line