What effect does the repurchase of shares by listed companies have on the stock price?

The purpose of listing a company is to issue shares and raise funds. The more shares are issued, the more funds will be raised. Of course, the company will also adjust the number of shares according to its own development, such as additional issuance or repurchase. Repurchase means that a company repurchases its own shares.

What effect does the repurchase of shares by listed companies have on the stock price?

It is usually regarded as good news and stimulates the stock price to rise. A company's share repurchase is often a signal to encourage investors. It is regarded as a sign that the company is optimistic about its own development, and shareholders can play an inspiring role by buying shares of their own company.

Benefits of repurchasing shares by listed companies:

1 is an important measure for the company to show its confidence in development and prove itself. It can convey multiple messages such as stable performance, abundant cash flow and undervalued value, which are all positive aspects.

If the company uses the repurchased shares for cancellation or equity incentive and employee stock ownership plan, it is of great significance to enhance the toughness of the company's equity, mobilize the enthusiasm of employees and enhance the company's investment value.

3 cater to the preferences of the regulatory authorities, because the repurchase of listed companies is a good thing, and the regulatory authorities always support and encourage it.

4. Stimulate investors to buy. After all, when a company repurchases shares, it often thinks that the company is not short of money and does not need so many shares to finance, which can push the stock price up.

Share repurchase means that a company repurchases its outstanding shares in cash, or by exchanging creditor's rights for equity, or by exchanging preferred shares for common shares. When a company buys back its shares, it actually eliminates some of them, which reduces the company's capital and may affect the price of its shares in the market.

However, the company's share repurchase is not beneficial to 100%. After all, whether the company's share price rises or not mainly depends on the company's performance, the supply and demand relationship of the stock itself, the company's fundamentals and the overall situation of the market. A single repurchase can't play a decisive role, but it may play a icing on the cake when the stock price rises and play a protective role when the stock price falls.