Share buyback
A company's purchase of its own shares using cash.
Plain languagePractical exampleConnected reading
01
What is it?
A company's purchase of its own shares using cash.
02
Why does it matter?
It can change share count and capital allocation, but value creation depends on price paid and funding quality.
03
How should it be read?
Assess purchase price, cancellation or treasury-share treatment, debt impact and alternative investment needs.
04
Common mistake
Assuming every buyback automatically increases per-share value.
A simple example
A debt-funded buyback at an excessive price can reduce share count while increasing balance-sheet risk.