share buyback


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Buyback

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.

share buyback

the purchase by a company of its own shares thereby reducing the amount of its ISSUED CAPITAL. Share buybacks are undertaken to return ‘surplus’ cash reserves to shareholders; more particularly they are undertaken to increase EARNINGS PER SHARE and DIVIDEND per share and thus (hopefully) lead to a rise in the company's share price. See SHARE ISSUE.

share buyback

the purchase by a company of its own shares, thereby reducing the amount of its ISSUED CAPITAL. Share buybacks are undertaken to return ‘surplus’ cash reserves to shareholders; more particularly, they are undertaken to increase earnings per SHARE and DIVIDEND per share and thus (hopefully) lead to a rise in the company's share price. See SHARE ISSUE.
References in periodicals archive ?
The goal of the Share Buyback Program is to promote an efficient use of available cash resources in order to maximize the Company's capital allocation;
With effect from the 30th April, the regime by which private limited companies perform share buybacks has changed, making it easier for them to buy back shares from departing employees who are members of an employees' share scheme.
The announcement of a share buyback can indicate that the management is so confident of the company's prospects that it believes the best investment it can make is to buy back its own shares.
As a whole, 251 companies in the index enacted share buybacks in the first quarter, up from 214 issues in the fourth quarter of 2009, 195 in third quarter of 2009, and 169 in the second quarter of 2009.
I hereby confirm that the Board focus remains on providing the maximum value for our shareholders, we therefore decided to initiate the share buyback program as we strongly believe in our franchise future performance.
Shares in both companies rose yesterday, even though Thomas Cook said it was suspending share buybacks as a result of the announcement.
The Board of Management of Germany-based Daimler AG (Daimler) (NYSE: DAI) (FWB: DAI is starting a new share buyback programme.
If the group goes ahead with plans to purchase pounds 200m of its own shares, it will be one of the largest share buyback programmes carried out by a midcap company in recent years.
A share buyback can provide the solution by returning the money to shareholders who can use it to take other investment opportunities.
The board of directors of Information Holdings (IHI; Stamford, CT), parent of MicroPatent, Master Data Center, Liquent--IDRAC and LPS Group, has approved a share buyback program, authorizing the company to purchase up to $30 million of common stock.
The agency also said that while the share buyback of 100 billion yen is cash outflow, the company has a high level of liquidity and financial strength to absorb the impact of the share buyback.
Investors usually consider share buyback programs, as they are also known, as a buy signal for the stock.