Basics
What is Buyback?
When a company buys back its own shares
Full Explanation
Instead of paying dividends, companies sometimes use their profits to repurchase their own shares from the market. This reduces the number of shares, which means each remaining share represents a bigger piece of the company.
Pro Tip
Buybacks usually push the stock price up. A sign the company thinks its own stock is cheap.
Related Basics Terms
Learn Investing Like a Game
Bite-sized lessons, a $100K practice portfolio, and Mr. Guy to explain anything in plain English.
Create Free AccountFree forever. No credit card needed.