What does it mean to cancel the share repurchase?

Stock cancellation refers to the stock issuing company's own purchase and cancellation of its issued shares.

It refers to the behavior of a listed company to buy back a certain number of shares issued by the company from the stock market in cash.

After the stock repurchase is completed, the company can cancel the repurchased shares, but in most cases, the company will keep the repurchased shares as "treasury shares".

It no longer belongs to tradable shares and does not participate in the calculation and distribution of earnings per share. Treasury shares can be used for other purposes in the future, such as issuing convertible bonds and employee welfare plans. Or sell them when you need money.

Stock cancellation means that a joint stock limited company reduces part of its shares in accordance with the issuance procedures. The total cancellation of shares only occurs when the company is dissolved. The cancellation of shares is mainly achieved through appropriate capital reduction procedures. In addition, by taking back the shares and merging with the company holding the shares of the company, the purpose of eliminating the shares can also be achieved, and the gold content of listed companies can be increased, and listed companies can buy back the eliminated shares.

Large-scale borrowing can be used to buy back stocks or pay special dividends, which can quickly and significantly increase long-term debt ratio and financial leverage and optimize capital structure. Re-capitalization often occurs in companies with strong competitive position and stable growth stage, but with low long-term debt ratio.

Because such companies have considerable underutilized debt financing capacity reserves, according to the financing decision criteria that the expected cash inflow risk of assets matches the capital structure, improving financial leverage can optimize the company's capital structure, reduce the company's overall capital cost, increase the company's value, and thus create value for shareholders.