Treasury Stock (Treasury Shares)
- Treasury Stock (Treasury Shares)
- The portion of shares that a company keeps in their own treasury. Treasury stock may have come from a repurchase or buyback from shareholders; or it may have never been issued to the public in the first place. These shares don't pay dividends, have no voting rights, and should not be included in shares outstanding calculations.
Treasury stock is often created when shares of a company are initially issued. In this case, not all shares are issued to the public, as some are kept in the companies treasury to be used to create extra cash should it be needed. Another reason may be to keep a controlling interest within the treasury to help ward off hostile takeovers.
Alternatively, treasury stock can be created when a company does a share buyback and purchases its shares on the open market. This can be advantageous to shareholders because it lowers the number of shares outstanding. However, not all buybacks are a good thing. For example, if a company merely buys stock to improve financial ratios such as EPS or P/E, then the buyback is detrimental to the shareholders, and it is done without the shareholders' best interests in mind.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
Treasury shares — shares issued in the name of the corporation. The shares are considered issued, but not outstanding.Usually refers to stock that was once traded in the market but has since been repurchased by the corporation. Treasury stock not considered when… … Financial and business terms
treasury shares — noun stock that has been bought back by the issuing corporation and is available for retirement or resale; it is issued but not outstanding; it cannot vote and pays no dividends • Syn: ↑treasury stock, ↑reacquired stock • Hypernyms: ↑stock … Useful english dictionary
treasury shares — See treasury stock … Black's law dictionary
treasury shares — Corporate stock which has been subscribed and paid for, but has thereafter been reacquired by the corporation by purchase, donation, forfeiture, or other means. 18 Am J2d Corp § 216 … Ballentine's law dictionary
treasury stock — see stock Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. treasury stock n … Law dictionary
stock — n 1 a: the equipment, materials, or supplies of a business b: a store or supply accumulated; esp: the inventory of the goods of a merchant or manufacturer 2: the ownership element in a corporation usu. divided into shares and represented by… … Law dictionary
Shares outstanding — are common shares that have been authorized, issued, and purchased by investors. They have voting rights and represent ownership in the corporation by the person or institution that holds the shares. They should be distinguished from treasury… … Wikipedia
Stock dilution — is a general term that results from the issue of additional common shares by a company. This increase in common shares of a stock can result from a secondary market offering, employees exercising stock options, or by conversion of convertible… … Wikipedia
treasury stock — ☆ treasury stock n. shares of issued stock reacquired by the issuing corporation and held by it … English World dictionary
treasury stock — Same as treasury shares … Ballentine's law dictionary
