Treasury stock

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Treasury stock

Common stock that has been repurchased by the company and held in the company's treasury.

Treasury Shares

Stock that a publicly-traded company issues but does not place with investors, or which it has bought back from shareholders. That is, the company holds its treasury shares back until such time as selling them becomes beneficial. Treasury shares have been issued, but they are not considered shares outstanding. Selling treasury shares to the public can be a less expensive way for the company to raise capital because the amount it spent issuing them previously is a sunk cost. Treasury shares are not included in "per share" calculations.

treasury stock

The shares of a firm's stock that have been issued and then repurchased. Treasury stock is not considered in paying dividends, voting, or calculating earnings per share. It may be retired or reissued. See also retirement.

Treasury stock.

Treasury stock is stock that an issuing company repurchases from its shareholders.

The company may choose to repurchase if it has cash available, as an alternative to investing it in expanding the business. Or it may issue bonds to raise the money it needs to repurchase, which changes the company's debt-to-equity ratio.

In most cases, the company offers to pay a premium, or more than the market price, to build its cache of Treasury stock.

Reducing the number of outstanding shares boosts the per-share value of the remaining shares and tends to increase the market price of the stock. That results, in part, because no dividends are paid on Treasury stock and it's not included in earnings-per-share calculations, boosting that ratio.

A company may buy back its stock for a number of other reasons, ranging from preventing a hostile takeover to having shares available if employees exercise their stock options.

It may also choose to resell the shares or use them to meet the demand for shares from holders of convertible securities.

References in periodicals archive ?
304 applies to recast a sale of shares of one controlled (acquired) corporation to an affiliated (acquiring) corporation as a redemption of shares by the acquiring corporation from the controlling (selling) corporation.
Medivir AB (STO:MVIR) on Friday reported a change in the number of shares and votes in the company due to redemption of shares under the voluntary redemption programme resolved at the extraordinary general meeting on 2 February 2017.
Sweco AB (STO:SWECB.ST), a European engineering and architecture consultancy, on Tuesday announced a change in the share capital and number of shares and votes in the company as a result of a new share issue, conversion and redemption of shares.
The company also completed its share redemption programme, announced in Q1 2015, resulting in redemption of shares at a value of SEK65m and share repurchases of SEK140m in accordance with the mandate given at the AGM in May 2015.
Also, in total SEK65m will be paid to the shareholders who have applied for redemption of shares.
According to the company, this decrease in share number is a result of the redemption of shares as a consequence of the implementation of the decision made by the Annual General Meeting on 31 March 2014, regarding a split with compulsory redemption procedure.
At that time, the compulsory redemption of shares was not possible in Germany.
"Since the general meeting is to vote upon the board of directors' proposal regarding redemption of shares, and we have seen that the market's expectations are significantly lower than what we will be reporting, we believe that it is appropriate, already now, to publish provisional results for the first quarter," said Anders Ullberg, CEO of SSAB.
Finnish real estate investment company Polar Real Estate Corporation said on Monday (29 March) that it had received notification from the German real estate company IVG Immobiliere SAS regarding the redemption of shares in Polar.
Sweco AB (STO:SWECA) announced on Friday a change in the share capital and number of shares and votes in the company as a result of a new share issue, conversion and redemption of shares.