Share Repurchases (Buybacks)

A share repurchase, or buyback, occurs when a company buys back its own shares. Companies may wish to boost the share price or financial ratios, return cash to investors, or prevent takeovers. A variety of repurchase methods may be employed including fixed price re-offer, Dutch auction or open market purchase. Here we explore the reasons why companies engage in buybacks, the different methods used to repurchase shares, and the drawbacks of the repurchase method.