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> A stock repurchase is basically nothing more than the company buying back stock, and giving holders the option to sell theirs to the company. The point of a
by postingawayonhn 7y ago
> A stock repurchase is basically nothing more than the company buying back stock, and giving holders the option to sell theirs to the company.
The point of a stock repurchase program is to decrease the number of shares on issue and therefore increase the value of each share. Theoretically share price = market cap / shares on issue.
- jjeaff 7y agoMarket cap equals share price times number of shares. But that equation can't be rearranged. Share price equals what the last person was willing to buy the stock at. Buying back stock does raise the price. But only because it clears out the sellers that are willing to sell at lower prices and leaves the higher ask prices.