Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 942  
Subject: Re: stock buybacks Date: 6/28/2001 1:08 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
What does a company do with the stock it buys back? Does the company get to keep the dividends on that stock or doesn't stock that is repurchased get to participate in dividends? What is to keep a company from buying back all its stock so that it doesn't have to report to the stockholders?

One common use for stock buybacks is to maintain an adequate pool for employee stock options. Another use might be for acquisitions, using the stock-swap purchase method instead of cash. I believe dividends are paid out on outstanding stock only.

As for buying up all its stock, this actually has been done by public companies wanting to take their company private again. It's not very common however, and would take an enormous amount of capital. I'm sure there are all kinds of regulations governing a public company's decision to become privately-held, not the least of which would be the SEC's interest in seeing that shareholders are adequately compensated for surrendering their stock.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next


Post of the Day:
Macro Economics

Looking at Oil and Gas
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.