Another term for stock repurchase, where a company purchases its own shares from existing shareholders. It's a method of returning capital to shareholders while potentially increasing the value of remaining shares.
Simple compound of 'share' from Old English 'scearu' (division) and 'buyback' (purchasing something previously sold). The term became common alongside stock repurchases in the late 20th century financial markets.
Share buybacks have become controversial because they can boost executive compensation tied to earnings per share without actually improving business fundamentals. Critics argue they prioritize short-term metrics over long-term investment in growth and innovation!
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