What does stock repurchase mean?

1. For our investors, the company's share repurchase means that the company thinks that the current share price may be much lower than the company's intrinsic value. Therefore, listed companies hope to recover the seriously undervalued shares through share repurchase and pass this information to the market, thus stabilizing the stock price and enhancing the confidence of investors. So under normal circumstances, if you buy back the company's shares, there may be a large number of purchases in the short term, which will lead to a rise in the stock price.

2. Share repurchase can also achieve a variety of purposes, such as improving the efficiency of capital use, improving the capital structure, reducing the pressure on the company's profit indicators, and reducing the risk of the company's acquisition. In addition, the company can also use treasury shares to issue convertible bonds and employee welfare plans. Or sell it when you need money.

Generally speaking, share repurchase is usually beneficial to our investors. However, some listed companies use repurchase to deceive investors, such as the actual repurchase amount is much lower than the announced repurchase amount, the upper and lower limits of stock repurchase are far apart, and the repurchase price is lower than the market price. The actual amount and quantity of repurchase are much lower than the information published in advance, so the repurchase is not enough to boost the stock price, and the repurchase price is lower than the market price, which can not fundamentally boost the stock price, and investors will eventually suffer losses. However, this situation was effectively solved in the Detailed Rules for the Implementation of Share Repurchase of Listed Companies promulgated at the end of 20 18.

1. Share repurchase refers to the behavior of the company to repurchase issued or circulated shares according to certain procedures; It is a defensive method to change the capital structure by buying back the shares issued by the company on a large scale. Is the target company or its directors and supervisors to buy back the shares of the target company. The main way is to buy back its issued shares in cash, either by exchanging creditor's rights for equity or by exchanging preferred shares for common shares.

2. Share repurchase has been widely stipulated abroad, especially in the mature capital market, and has become an important financial activity. China's "Company Law", "Provisional Regulations on the Administration of Stock Issuance and Trading" and other laws and regulations have made certain provisions on relevant contents, but they are rarely implemented in practice. The typical practice is that listed companies reduce their holdings of state-owned legal person shares. For example, Lujiazui began to buy back state-owned shares at 1994; 1at the end of 999, Shenneng became a state-owned share repurchase enterprise; Then, the sky is changing, the refrigerator is compressed, Changchun Hi-Tech and so on. They also successively reduced their shares by repurchasing state-owned shares.

3. The anti-takeover effect is mainly manifested in two aspects: on the one hand, it reduces the circulating shares and increases the difficulty for the buyer to obtain all the shares; On the other hand, it will raise the stock price and increase the acquisition cost. In addition, repurchasing shares can also enhance the right to speak of the target company or its directors and supervisors. Of course, share repurchase may also produce another result, that is, share repurchase may lead to the disillusionment of the acquisition dream, and investors with the concept of speculative acquisition will be disappointed, which will lead to the decline of the stock price.