foxex: What is a 'Buyback'?

Monday, June 17, 2019

What is a 'Buyback'?

A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available on the open market. Companies buy back shares for a number of reasons, such as to increase the value of remaining shares available by reducing the supply or to prevent other shareholders from taking a controlling stake.

Related to "Buyback"

The impact of share repurchases

Share repurchases can have a significant positive impact on an investor's portfolio and are a great way to build investor wealth over time.

6 Bad Stock Buyback Scenarios

Buying back shares can be a sensible way for companies to use extra cash. But in many cases, it is just a ploy to boost earnings.

4 Reasons Investors Like Buybacks

Buybacks benefit investors by improving shareholder value, increasing share prices, and creating tax-beneficial opportunities.

Related Definitions

Tender Offer

A tender offer is an offer to purchase some or all of shareholders' shares in a corporation.

Buyback Ratio

Buyback ratio is amount of cash paid by a company for buying back its shares over the past year, divided by its market cap at the beginning of period.

Direct Repurchase

Direct repurchase is the buying of shares in a publicly-traded company by the company itself.

S&P 500 Buyback Index

S&P 500 Buyback Index is an index designed to track the performance of the 100 stocks in the S&P 500 with the highest buyback ratios.