Buyback

The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

A buyback allows companies to invest in themselves. By reducing the number of shares outstanding on the market, buybacks increase the proportion of shares a company owns. Buybacks can be carried out in two ways:

1. Shareholders may be presented with a tender offer whereby they have the option to submit (or tender) a portion or all of their shares within a certain time frame and at a premium to the current market price. This premium compensates investors for tendering their shares rather than holding on to them.

2. Companies buy back shares on the open market over an extended period of time.


Investment dictionary. . 2012.

Look at other dictionaries:

  • buyback — buy·back / bī ˌbak/ n: an act or instance of buying something back; esp: the repurchase by a corporation of shares of its own common stock on the open market Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • buyback — ☆ buyback [bī′bak΄ ] n. 1. an agreement to buy something in return, as by a supplier to buy its customer s product 2. a sale whereby something sold is repurchased from the buyer by the seller or original owner 3. Finance the buying by a… …   English World dictionary

  • buyback — The covering of a short position by purchasing a long contract, usually resulting from the short sale of a commodity. Bloomberg Financial Dictionary See: short covering, stock buyback. Bloomberg Financial Dictionary Also used in the context of… …   Financial and business terms

  • buyback — noun the act of purchasing back something previously sold • Syn: ↑redemption, ↑repurchase • Derivationally related forms: ↑buy back, ↑redeem (for: ↑redemption), ↑repurchase …   Useful english dictionary

  • buyback — /buy bak /, n. 1. the buying of something that one previously sold. 2. any arrangement to take back something as a condition of a sale, as by a supplier who agrees to purchase its customer s goods. 3. Also called stock buyback. a repurchase by a… …   Universalium

  • buyback — buy|back [ baı,bæk ] noun count BUSINESS an arrangement in which someone agrees to buy back SHARES or property that they previously sold to someone: a buyback program that removed 640,000 guns from private ownership …   Usage of the words and phrases in modern English

  • buyback — noun Date: 1963 the act or an instance of buying something back; especially the repurchase by a corporation of shares of its own common stock on the open market …   New Collegiate Dictionary

  • buyback — noun a) The repurchase of something previously sold, especially of stock by the company that issued it. b) A free drink given to a patron by a bartender …   Wiktionary

  • Buyback — Buy back auch: Buy|back 〈[baıbæ̣k] m. 6 oder n. 15; Wirtsch.〉 Rückkauf einer Beteiligung (bes. in Form von Aktien) durch den Veräußerer [engl., „Rückkauf“] …   Universal-Lexikon

  • buyback — n. act of re buying merchandise (by a store) that was previously sold to a customer …   English contemporary dictionary

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