Share Repurchase


DEFINITION of 'Share Repurchase'

A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. Share repurchase is usually an indication that the company's management thinks the shares are undervalued. The company can buy shares directly from the market or offer its shareholder the option to tender their shares directly to the company at a fixed price.

BREAKING DOWN 'Share Repurchase'

Because a share repurchase reduces the number of shares outstanding (i.e. supply), it increases earnings per share and tends to elevate the market value of the remaining shares. When a company does repurchase shares, it will usually say something along the lines of, "We find no better investment than our own company."

  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  3. Treasury Stock (Treasury Shares)

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

    A specific method by which corporations can repurchase outstanding ...
  5. Normal-Course Issuer Bid - NCIB

    A Canadian term for a company repurchasing its own stock from ...
  6. Undervalued

    A financial security or other type of investment that is selling ...
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