Corporate repurchase

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Related to Corporate repurchase: stock buyback

Corporate repurchase

Active buying by a corporation of its own stock in the marketplace. Reasons for repurchase include putting idle cash to use, raising EPS, creating support for a stock price, increasing internal control (shark repellant), or stock for ESOP or pension plans. Repurchase is subject to rules, such as that buying must be on a zero minus or a minus tick, after the opening and before 3:30 p.m.


The act of a publicly-traded company buying its own stock, sometimes at a price well above fair market value. Buyback is not intended to stop trade on its stock. Rather, it is an attempt either to reduce the supply of shares in the market (with the hope of driving up the share price) or to prevent a real or suspected hostile takeover. If a company becomes its own majority or plurality shareholder, it either makes a hostile takeover impossible or more expensive for the acquiring company. A buyback may occur all at once or gradually over time. See also: Antitakeover measure, Self-tender offer.
References in periodicals archive ?
In fact, many companies apply the same "blackout period"--forbidding all trades--to corporate repurchases as they do for insider stock purchases by individuals.
0 million fixed rate long-term corporate repurchase agreement leaving the balance of borrowings steady and extending its duration.
Cheevers & Company will execute corporate repurchases through the safe harbor of SEC Rule 10b-18, which allow issuers to trade during blackout periods and have an affirmative defense against insider trading violations.

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