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.
Kodak had been spending about $1 million a day to buy back stock as part of the share repurchase plan approved April 16, 1999.
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.
Commissioner in August 1994 that fees incurred to obtain debt capital used to buy back stock could not be deducted.
Public companies are also scaling back stock awards due to expensing requirements, investor dilution and the back-dating scandals," Broman added, "allowing the new era of dot com companies to attract top talent.
However, it said it has no obligation to buy back stock under this programme and may suspend or terminate the programme at any time.
A survey recently published by the University of Texas says that many companies offer to buy back stock to increase the stock's value and viability, but less than half of the buybacks ever take place.
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.
The company's available cash resources will be used to buy back stock which if and when effectuated, will be made subject to market conditions, applicable legal requirements and other factors, it said and added that it is not obligated to acquire any particular amount of common stock and that the plan may be modified, extended or terminated at any time at its discretion.