Stock Markets Exposed

what is and why stock buyback? is it the same as repurchase? is it a good news to the market?

Public Comments

1. A stock buy back is when a company buys back some of it's own stocks. For example, stock A has 100,000 shares outstanding and has a net income of 100,000 dollars, (1 dollar per share) and the company buys back 10,000, not only will the stock go up, because stock prices go up when there is an increased demand for a buy, and now they would have 90,000 shares outstanding so each share now makes $1.11 per share. The negative part, is that this company would have less cash, and their stock equity drops, makes them less valuable in the books. Large companies or cash stable companies have buy back policies.
2. Buyback=repurchase. Generally considered good since it means company has lots of cash they want to park, and they consider their own stock the best investment. With fewer shares on the market, the remaining ones ALWAYS go up in price, even if just a little.