Share Buyback
Contents
Key Points
- The company buys within a programme approved by the general meeting or permitted by the CMB, up to a set maximum number of shares and price range, and discloses each transaction on KAP.
- Companies use buybacks when they believe their shares trade below value or as an alternative to dividends for returning cash to shareholders.
- a buyback is not proof that a company is cheap and can raise financial risk if funded with debt.
Formula / Calculation
EPS after buyback = Net profit / (Total shares − Shares bought back). Buyback ratio = Shares bought back / Total shares.
Worked Example
A company with TRY 1 billion of net profit and 500 million shares has EPS of TRY 2.00. If it buys back 25 million shares, EPS rises to 1,000 / 475 ≈ TRY 2.11.
The figures are hypothetical values chosen to explain the concept; they are not data for any real fund, stock or market.
Interpretation
Companies use buybacks when they believe their shares trade below value or as an alternative to dividends for returning cash to shareholders. With fewer shares outstanding, earnings per share can rise, and a buyback announcement may be read as a confidence signal.
Pitfalls
a buyback is not proof that a company is cheap and can raise financial risk if funded with debt. An announced programme may not be fully executed. Shares bought back may be resold later.
Official Sources
Official regulation and sources the definition is based on.
Pages Where This Term Appears
Related Terms
Frequently Asked Questions
What is Share buyback?
A share buyback is a listed company purchasing its own exchange-traded shares from the market.
How is Share buyback calculated?
EPS after buyback = Net profit / (Total shares − Shares bought back). Buyback ratio = Shares bought back / Total shares.
Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy