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To: Thehammer who wrote (314497)11/3/2021 5:56:45 PM
From: bruwin2 Recommendations

Recommended By
Honey_Bee
Thehammer

   of 456438
 
Yes, you're quite right. When a company buys back its shares they go back into the original "pot" of shares the company was allocated by the NYSE, etc.
The company can sell shares from that "pot", i.e. its Treasury, whenever it wants to, to obtain Capital from the public.

Generally speaking a company will buy back its shares to (1) reduce its common shares out there in the "market place" which should raise the share price, and (2) to improve its Earnings per Share, EPS, because the "Denominator" is now smaller so EPS gets bigger. If EPS gets bigger then its P/E ratio gets smaller, which is usually an attractive feature for investors ....... A sort of "Win-Win" situation ......
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