Stock Buyback What Is It and Why It Matters for Investors

1963 reads · Last updated: December 8, 2025

A stock buyback, also known as a share repurchase, is a corporate action in which a company buys back its own shares from the marketplace, using cash or other assets. By repurchasing its shares, the company reduces the number of outstanding shares, which often leads to an increase in earnings per share (EPS) and potentially enhances the value for remaining shareholders. Stock buybacks can signal management's confidence in the company's future prospects and can be a means of returning excess cash to shareholders. The repurchased shares can either be retired, reducing the company's total share count, or held as treasury shares for future use.

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