Investopedia

Continue to Site »

Normal-Course Issuer Bid - NCIB

Filed Under »
Dictionary Says

Definition of 'Normal-Course Issuer Bid - NCIB'

A Canadian term for a company repurchasing its own stock from the public in order to cancel it. In a normal-course issuer bid (NCIB), a company is allowed to repurchase between 5 and 10% of its shares depending on how the transaction is conducted. The issuer repurchases the shares gradually over a period of time, such as one year. This repurchasing strategy allows the company to buy only when its stock is favorably priced.
Investopedia Says

Investopedia explains 'Normal-Course Issuer Bid - NCIB'

Companies must file a Notice of Intention to Make a NCIB with the stock exchanges they are listed on and receive approval from the exchange before proceeding with the repurchase. There are limits on the number of shares the company can repurchase in a single day.

In another type of issuer bid, a company will repurchase a set number of shares from all of its shareholders at a predetermined date and price. An issuer bid where a company repurchases all of its shares in this manner is a going private transaction.

Articles Of Interest

  1.

    Digging Into Book Value

    This calculation will serve up your portion of the shareholder pie.

  2. A Breakdown Of Stock Buybacks

    Find out what these company programs achieve and what it means for stockholders.

  3. Why Do Companies Care About Their Stock Prices?

    Read on to learn more about the the nature of stocks and the true meaning of ownership.

  4. How Buybacks Warp The Price-To-Book Ratio

    Relying on price-to-book can get ugly if a company has repurchased stock. Learn why.

  5. Cash: Can A Company Have Too Much?

    Cash is something companies love to have. But if they are not using it there could be problems.

  6. 6 Bad Stock Buyback Scenarios

    Buying back shares can be a sensible way for companies to use extra cash. But in many cases, it's just a ploy to boost earnings.

  7. What happens when a company buys back its shares?

    When a company performs a share buyback, there are a few things that the company can do with the securities they buy back. The company can reissue the stock on the market at a later time. In ...

  8. The NYSE And Nasdaq: How They Work

    Learn some of the important differences in the way these exchanges operate and the securities that trade on them.

  9. Are The NYSE Trading Floor's Days Numbered?

    The Intercontinental Exchange plans to buy the NYSE Euronextfor $8.2 billion. This article examines the implications of the potential sale.

  10. Has High Frequency Trading Ruined The Stock Market For The Rest Of Us?

    HFT is a controversial trading strategy. This article looks at how HFT affects the retail investor.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center