Back Stop

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Back Stop

In an issue of new stock, a guarantee made by an investor, usually an institution, to a publicly-traded company that it will buy the remainder of an issue if the company is unable to place it all with other investors. For example, an institution may announce that it will provide 100% back stop to a company's new issue up to $50 million. If the company only raises $35 million by placing the security with other investors, the institution will buy the remaining $15 million worth of stock.
References in periodicals archive ?
EDT (1900 GMT) that the Fed had given it permission to raise its dividend by 20 percent and spend as much as $12 billion buying back stock this year.
At a number of American corporations, management has spent millions of company dollars at shareholder expense to buy back stock from raiders at inflated prices in order to preserve the executives' corporate power.
So, not only will our shareholders now own two strong companies with market-leading brands, but also Sara Lee will return significant capital to our shareholders through buying back stock, reducing debt and continuing to pay a healthy dividend, while funding the growth of our core businesses.
Many of the companies that bought back stock in 1987 were showing weak profits, she said, and the additional spending to repurchase stock only seemed to weaken them further.
Fitch anticipates that INDB will continue to build capital ratios, albeit while continuing to buy back stock.
Chubb gets out of a business it says is too small to compete profitably and will use the proceeds to buy back stock.
MIR), including the Issuer Default Rating (IDR) of 'B+', and its subsidiaries on Rating Watch Negative following its announced plans to buy back stock and sell its Philippine and Caribbean assets (see complete list below).
BankAmerica also is focusing on buying back stock to boost per-share earnings by reducing the number of outstanding shares.
According to the independent accounting and reporting firm, insider selling of shares while the corporation is buying back stock, while not necessarily illegal, presents a clear conflict of interest.
0 billion in additional funds for use in its stock repurchase program, the largest authorization for buying back stock in the company's history.
But, there are plenty of examples of companies that bought back stock not to delay the discovery of or to hide problems, but because company management knew the stock was undervalued.
Doll predicts that companies will continue to put that money to work by increasing their merger and acquisition activity, and to a lesser extent, by raising dividends, buying back stock and making capital investments - all of which is good news for the stock market.