Corporate Stock REPURCHASE [Buy-Back] Programs

By Staff Reporters



A stock buyback is when a public company uses cash to buy shares of its own stock on the open market. A company may do this to return money to shareholders that it doesn’t need to fund operations and other investments

Share buybacks can create value for investors in a few ways: Repurchases return cash to shareholders who want to exit the investment. With a buyback, the company can increase earnings per share, all else equal. The same earnings pie cut into fewer slices is worth a greater share of the earnings.

A stock buyback typically means that the price of the remaining outstanding shares increases. This is simple supply-and-demand economics: there are fewer outstanding shares, but the value of the company has not changed, therefore each share is worth more, so the price goes up.


But, the practice has faced criticism from labor unions, the SEC, and even President Biden, who proposed stricter stock buyback regulations for company execs last week.


  • Stock buybacks from S&P 500 companies are expected to pass $1 trillion this year, after hitting a record $882 billion in 2021, according to Goldman Sachs.
  • In recent years, Starbucks spent $13.5 billion repurchasing shares.



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