Telia Company AB, the Swedish telecom giant, has always been a bit of an enigma. Trading on the PINK exchange under the symbol TLSNY, the company has maintained a relatively low profile despite boasting a market capitalization exceeding $9.6 billion. Recent financial data reveals a fascinating anomaly, a potential phantom stock buyback program cleverly disguised within the company's complex financial statements.

Telia's most recent quarter, ending March 31, 2024, showcases a remarkable drop in outstanding shares. The company reported 1.96 billion shares outstanding compared to 3.93 billion shares at the end of 2023, a reduction of almost 50%. This dramatic decrease should have sent shockwaves through the market, signaling a massive buyback program and driving up the share price. But, curiously, the market barely reacted.

The absence of fanfare surrounding this substantial reduction in shares raises eyebrows. Traditional stock buyback programs are usually announced with much publicity, allowing companies to showcase their confidence in future prospects and boost shareholder value. Telia, however, seems to have taken a more covert approach, quietly reducing their share count without attracting undue attention.

Dividend Payout and Share Reduction

A closer examination of the financial data offers a glimpse into Telia's possible strategy. The company's cash flow statement for the quarter reveals a hefty dividend payout of 1.96 billion SEK, roughly equivalent to the number of shares reduced. This correlation suggests a creative tactic: instead of repurchasing shares directly, Telia may be channeling funds through dividend payments, effectively enabling shareholders to reinvest and acquire the "retired" shares.

This hypothesis finds further support in Telia's history of dividend payments. The company has consistently distributed dividends, demonstrating a commitment to rewarding shareholders. The recent dividend payment, however, stands out due to its sheer magnitude, significantly exceeding previous payouts.

Telia's Potential Motives

The question remains: why would Telia orchestrate a covert buyback through dividends? The answer might lie in the company's desire to avoid the immediate market impact of a traditional buyback. Telia, perhaps wary of inflating its share price prematurely, might be aiming for a more gradual appreciation, allowing the market to organically recognize its inherent value over time.

Furthermore, this discreet approach could be a calculated move to minimize scrutiny from regulators. Stock buyback programs can attract attention, especially when executed on a large scale. By opting for a dividend-driven buyback, Telia might be circumventing potential regulatory hurdles and navigating a more streamlined path towards reducing its share count.

Outstanding Shares over Time

It's important to note that this is a hypothesis based on the available data. Telia has not officially confirmed a stock buyback program, and further investigation is necessary to definitively prove the existence and motives behind this potential strategy.

However, the significant reduction in outstanding shares coinciding with a substantial dividend payout strongly suggests a deliberate effort to reduce Telia's share count. This unconventional method, if confirmed, showcases the company's financial ingenuity and potentially reveals a hidden layer of shareholder value waiting to be unlocked.

This discovery, seemingly overlooked by other analysts, could present a compelling opportunity for savvy investors. Telia's "ghost in the machine" might just be a phantom buyback program, silently shaping the company's future and potentially paving the way for a significant market upswing.

"Fun Fact: Telia Company AB can trace its roots back to 1853, making it one of the oldest telecommunications companies in the world. From its humble beginnings as the Royal Swedish Telegraph, Telia has evolved into a modern digital service provider."