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Buybacks share

Buybacks share. Name: Amornrat Srichuchart ID: MA0N0237. Buyback Share - meaning.

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Buybacks share

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  1. Buybacks share Name: AmornratSrichuchart ID: MA0N0237

  2. Buyback Share - meaning • The repurchase of outstanding shares(repurchase)by a company in order to reduce the number of shares on the market. Companies will buyback 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. • Buy backs reduce the number of shares outstanding on the market which increases the proportion of shares the company owns.

  3. Why the company buyback shares ? • Company believes their stocks are undervalued.

  4. BUYBACK SHARE : Positive Aspects • Company can sell shares in the stock market when they would like to raise money. • Avoiding takeover situation by reducing the number of shares in circulation. • Slow down the dividend payment.

  5. BUYBACK SHARE: NegativeAspects • Possible mismanagements may arise if too high price is paid for the re-purchased shares

  6. CBS Corporation : Background • an American mass media corporation • focused on:  commercial broadcasting publishing billboards  television production

  7. Buyback share in USA. • Since 2003, The market for buybacks has boomed, with repurchases nearly on a par price. • In 2006, $437 billion of stock was repurchased.

  8. CBS corporation • Announced in March 2007 that it would buy back $1.4 billion worth of stock. • share price increased 4.5 %. Why ? • Investors think that is a good signal.

  9. Are buyback really a bargain ? • New research shows that companies often use creative financial reporting to push earning downward before buybacks. • Making the stock seem undervalued and causing its price to bounce higher after the buyback.

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