SHOCKS OR SHARES BUY BACK

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Stocks/Shares buyback is the repurchasing of shares by the company that issued them. It happens when the issuing company pays shareholders the market value per share and reabsorbs that portion of its ownership that was previously distributed among public and private investors.

Generally, when a company buys back its own  shares, it effectively reduces its share capital by reducing the number of shares held by the public in a way that if the profits of such company remain the same, the company EPS would increase.

A company would buyback its own shares for reasons as these; ownership consolidation, undervaluation and boosting financial ratios.

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