Rita Lai asked in 商業及金融投資 · 1 decade ago

share buy back

anyone konw if the company want to buy back the share from market, is it mean that they will offer a higher price to buy back the share from the investor?

1 Answer

  • ?
    Lv 6
    1 decade ago
    Favorite Answer

    In Hong Kong, share buyback are usually done in the market and basically, a company will instruct a broker to buy its own shares in the market, then make public announcements about the number of shares they bought. In the U.S., share buybacks are usually announced prior to execution. A company will announce a buyback program with an approximate sum of money spend on buybacks. In this way analyst can estimate the weighted average number of shares and capital used in the process.

    As to whether they will offer a higher price, the answer is that they normally do not because the number of shares involved each buyback is small, and can be accumulated. Only in a tender offer situation (a general offer) will an investor announced a higher price for buying out the company.

    Hope it helps, and please let me know if you need further clarifications.

    Source(s): My financial knowledge
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