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.
"Generally, everyone is up to speed on Rule 10b-18 and how to buy back stock within the confines of the rules"
Shareholders have to wonder why they're paying top executives millions of dollars a year if all they do is buy back stock with the cash the company earns." If more reporters, analysts, and investors began to see through the buyback's sham virtues, more CEOs would start investing in innovation-which would mean a dividend not just for captains of industry and their stockholders, but for dwindling American competitiveness, too.
The company will buy back stock regularly under applicable securities laws, via solicited or unsolicited transactions in the open market or in privately negotiated transactions without a time limit on the duration of the share repurchases.
State-owned VTB (VTBR.RS), Russia's second largest bank, will buy back stock from shareholders that participated in a disastrous 2007 initial public offering, using its own profits rather than budget funds, Dow Jones has reported, citing local news agencies.
The share repurchase is in compliance with regulations which require that the bank can buy back stock without exceeding its own financial resources, including reserves, retained earnings and share premiums.
Screening for a superior debt rating eliminates companies that buy back stock so they can increase their financial leverage, that is, take on more debt, according to Braverman.
To lift earnings per share, Wells has been buying back stock at a rate of 1.6 million shares per quarter from a base of 52 million shares outstanding at the end of 1993.
Commissioner in August 1994 that fees incurred to obtain debt capital used to buy back stock could not be deducted.
In this case, Dynamic will be buying back stock. Dynamic will then account for this repurchase as purchased R&D.
Liberty is a pure play holding company with "hard control of the underlying business," yet the stock trades with the widest discount versus comps, said Swinburne, who noted that the spread has begun to tighten and that he believes it should continue to tighten as Liberty and SiriusXM buy back stock. He also resumed coverage of Sirius XM with an Equal Weight rating and $6.50 price target.
However, it said it has no obligation to buy back stock under this programme and may suspend or terminate the programme at any time.