Repurchase

Repurchase refers to the act of buying something again or reacquiring ownership of something that was previously sold or disposed of. In business and finance, repurchase has several formal meanings tied to ownership, financing, and consumer markets.

In corporate finance, stock repurchase or share repurchase is a corporate action where a company buys back its own outstanding shares. This reduces the number of shares in circulation, which can raise earnings per share and potentially support the stock price. Companies pursue repurchases to deploy excess cash, signal confidence in future prospects, or optimize capital structure. Common methods include open market purchases, tender offers, and accelerated share repurchase agreements.

In debt markets, a repurchase agreement, or repo, is a short-term financing transaction in which one party sells securities to another with an agreement to repurchase them later at a higher price. Repos provide liquidity and are typically collateralized, often with government or high-quality securities. The reverse repo is the corresponding transaction in which the roles are reversed. Repos are widely used by financial institutions and central banks to manage funding and liquidity.

In consumer and retail contexts, repurchase programs or buyback schemes are offered by manufacturers and retailers to encourage upgrading, recycling, or resale of products. Examples include device trade-in programs and vehicle buyback offers, where customers can return an item in exchange for credit toward a newer model or other purchase.

Legal and accounting treatment varies by jurisdiction and context. Stock repurchases affect equity and earnings per share, while repos are treated as collateralized borrowings or financing arrangements depending on the applicable standards.