Investing in the Company

• Buying company shares can help increase stockholder returns.Beach Words image by Francois du Plessis from Fotolia.com
  
  Many companies that issue a share repurchasing order will state that the goal is to invest in the company. Any publicly traded company is in business to increase the return on investments and to maximize the company profits on behalf of the company shareholders. A stock-repurchase plan can often help to generate more interest in a company stock, and it might even increase the value of a company's stock for increased revenue and return to all existing stockholders.
  
  

Increasing Shareholder Profits

• Limiting the number of company shares increases the value of the remaining shares.diagram of profit image by NatUlrich from Fotolia.com
  
  A stock-repurchasing plan can help improve shareholder profits for all remaining shareholders of a company, because essentially when company shares are repurchased by the issuing company, those shares are automatically reabsorbed into the company's financial assets. The number of outstanding shares available for stockholder purchase on the open market is reduced by the number repurchased by the company. Because the supply of shares is reduced, the demand might increase, along with the purchase price of the remaining shares. The rising share price benefits stockholders who retain company stock.
  
  

Building Investor Confidence

• Company stock repurchasing can help allay investor fears about financial instability.frustrated business man image by Melking from Fotolia.com
  
  Some companies choose to invest in a stock repurchasing plan to steel investor confidence in the company. Repurchasing company stock shows the investors that the company maintains confidence in the stability and future success of its company operations. An investor could reason that a company would not waste good money purchasing worthless company stock if the company were headed for catastrophe. A company stock repurchase can boost investor confidence enough to create a buying surge of the stock.
  
  

Driving Up Demand

• Reduced availability of stocks can increase demand and make investors take notice.wanted image by Blue Moon from Fotolia.com
  
  Attempting to increase stock demand is another reason a company might choose to repurchase its stock. When a company decreases the number of open shares on the market, the supply is significantly reduced. If investors have taken little notice of a particular stock, reducing the availability of shares can create a level of exclusivity that stimulates interest in the stock.
  
  

Gaining More Control

• Some companies buy back company control through a stock buyback.buy 3d sign image by onlinebewerbung.de from Fotolia.com
  
  Some companies use a stock-repurchase plan as a means to gain more control of the company itself. When a company is publicly traded, decisions regarding the company future are based at least in part on the votes of the shareholders. Some companies seek to regain private control by regaining the public stocks gradually with buyback programs.