Questions relating to companies buying back their own shares from the market.
Questions tagged [share-repurchase]
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What happens if a company buys back all of its shares?
As far as I know, it shouldn't happen, a company shouldn't have that much cash to be able buy all of its shares, because the share price should indicate that the company has that much cash in the first place - but let's suppose it happens (e.g. the…
user2414208
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Why would one choose to sell stock back to a company for less than their current market price?
Marathon Petroleum Corporation (MPC) is currently offering to buy back $4 billion USD of their stock (reference).
The minimum they will pay is $56, and the maximum is $63.
Given that this equity is currently trading at $63.61, why would someone want…
user109880
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How are stock buybacks not considered insider trading?
If, for example, a company knows it is about to have a large, long-term windfall (such as landing a major contract), it could use this knowledge to increase its value by initiating a buyback. How is this not the same as insider trading?
Or are…
Brian Risk
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Do companies sell puts when buying back shares?
Say company X has a share price of $80. They think their shares are undervalued, and their board approved a buyback of $1 billion. Can company X use the $1 billion to sell puts at $79, with the idea that if the price drops they buy back at cheaper…
Allure
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Why is stimulus to the airlines opposed because of past buy back history?
I was reading this article where the Airline Union is opposing the Fed to grant stimulus to the Airlines. The reason is that Airlines did a lot of buy back in the past four years. Why is the history of buy back in the past the reason?
wonderful world
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Why would a company like Apple be buying back its own shares?
What is the reason that a company like AAPL is buying back its own shares? Does it have too much cash and it doesn't know what to do with it? So it is returning the cash back to investors?
Victor123
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How do share buybacks work?
When a company announces a share buyback program, who do they actually buy back the shares from? Openly traded shares on a stock exchange? Is there a fixed price that they buy back at?
If I own shares in that company, can I get them to buy back my…
NL49
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Are stock buybacks similar to dividends?
I read an article about share buybacks.
Tax Benefit In many ways, a buyback is similar to a dividend because
the company is distributing money to shareholders. Traditionally, a
major advantage that buybacks had over dividends was that they…
e12345678
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How do I account for a forced buyback (repurchase) of shares if I buy them back within 30 days?
A company I held shares in forced a buyback of a portion of my shares in them. Within 30 days, I then bought back that same number of shares to maintain my holding and basis. However, taking the two transactions together (the forced repurchase plus…
Roger Pearce
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Why are my country's banks buying their own shares now?
In light of the Covid-19 crisis, my country's banks have seen their shares' prices drop. Last week, the banks announced that they will doing a share buyback, and this week, the prices of the shares have increased...
Is there any reason why the banks…
Kyoma
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Should I buy shares in public institutions when they are privatized?
Recently, the government in my country has been privatising big institutions, selling shares mostly to its citizens.
There is of course incentive to buy it from the government, they've been pushing it pretty hard.
Now. I'm a 20 something guy, I…
Yann G
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What's the point of share repurchases?
Let's say a company has a market cap of $11 million, 1 million shares outstanding, no debt, and $1 million in cash. Right now, if I am an investor, I own some shares that are worth $11 each. If the firm repurchases shares at $11, the stock price…
Vasting
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Why is a share repurchase considered a payout to investors?
I have read many financial analysis articles that seem to calculate a company's payouts to its shareholders like this:
total payout = cash dividends + share repurchases
I can easily see why a cash dividend is a payout — I receive cash from the…
Flux
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Can a company legally hold back on a buyback until after providing a poor earnings report?
Related and sort of a follow-up to Can a company legally depress their stock price in order to supercharge their buyback program?
Let's say a company has a share buyback plan in progress. They know that their next earnings release is going to be…
Allure
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Misnomers in comparing stock buybacks to dividends
I found this question particularly helpful:Are stock buybacks similar to dividends?
Not too far off from this angle, my textbook has this as an introduction to stock buybacks:
Share repurchases are an alternative to cash dividends as a way…
Arash Howaida
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