Direct Repurchase


DEFINITION of 'Direct Repurchase'

The buying of shares in a publicly-traded company by the company itself. A direct repurchase reduces the number of shares outstanding, thereby inflating (positive) earnings per share and, often, the value of the stock. The stock purchased by the company can then be retired or kept as treasury stock, which can be re-issued at a later date.

BREAKING DOWN 'Direct Repurchase'

Direct repurchases are often seen in a very positive light, as such transactions are generally done by companies looking to increase the equity value of their shares. However, just because a company announces the intent to repurchase outstanding shares, does not mean that it will definitely happen.
Until 2004, companies did not have to disclose whether they repurchased company stock or not. The SEC now requires that companies divulge their share repurchases for the past quarter in their 10-Q and 10-K filings.

  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Treasury Stock (Treasury Shares)

    The portion of shares that a company keeps in their own treasury. ...
  3. Accelerated Share Repurchase - ...

    A specific method by which corporations can repurchase outstanding ...
  4. Takeunder

    An offer to purchase or acquire a public company at a price per ...
  5. Dividend Reinvestment Plan - DRIP

    A plan offered by a corporation that allows investors to reinvest ...
  6. Buyback

    The repurchase of outstanding shares (repurchase) by a company ...
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