For publicly traded companies – both large and small – the use of a share repurchase, or stock buyback-program offers many benefits including:
- flexibility in timing and amount of shares repurchased in budgeting and forecasting of capital expenditures, cash flow from operations, strategic initiatives and other corporate objectives
- timing of purchases based on share valuation, market sentiment and other considerations
- potential messaging to the investment community about management’s and the board’s opinion of valuation
- authorization can be flexible and used without further signaling to the market and investors, unlike dividends which, if discontinued, may send a negative signal to investors
- purchases will reduce any potential overhang caused by company specific or market factors or investors’ liquidity needs and potentially lead to a sustained share price level increase, thus increasing the value of shares as employee incentives or in M&A situations
Benchmark’s deep equity trading expertise and extensive experience in trading and execution services make us a strong choice in executing these corporate buyback programs.
Benchmark will assist in evaluation of a share repurchase program and provide recommendations and advice on the timing of purchases based on share valuation, market sentiment and other considerations to help manage the process with as little distraction as possible to the company.