Corporate Repurchase

Corporate Repurchase - A corporate repurchase is a program, which enables companies to purchase, or boy back, its own shares from the marketplace, in order to reduce the number of shares the company has outstanding. Usually, this is a true indication that the management of the company feels that its shares are undervalued at the time of the buy back. Because this action reduces the company's shares that are outstanding, it in turn, increases the amount of earnings obtained for each share, and generally elevates the market value or all remaining shares. This type of purchase of a long position of often used to offset a short position, also called a buy back.