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buyback
A corporation's repurchase of stock or bonds it has issued.
In the case of stocks, this reduces the number of shares
outstanding, giving each remaining shareholder a larger
percentage ownership of the company. This is usually considered
a sign that the company's management is optimistic about the
future and believes that the current share price is undervalued.
Reasons for buybacks include putting unused cash to use, raising
earnings per share, increasing internal control of the company,
and obtaining stock for employee stock option plans or pension
plans. When a company's shareholders vote to authorize a
buyback, they aren't obliged to actually undertake the buyback.
also called corporate repurchase.
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