Treasury Stock

What is Treasury Stock?

Treasury Stock refers to shares that were originally issued and later repurchased by the issuing corporation. These shares are held in the company's treasury and can be used for various purposes, such as reissuing to employees as part of stock compensation plans or to influence mergers and acquisitions. Treasury shares do not pay dividends, have no voting rights, and are not included in shares outstanding calculations.

Short Description: Shares that were once part of the outstanding shares of a corporation but have been repurchased by the company.

• Non-Voting: Treasury stocks do not confer any voting rights to the company.
• No Dividends: These shares do not qualify for dividends distributions.
• Balance Sheet: Appears as a negative number in the shareholders' equity section of the balance sheet.

The repurchase of treasury stock can be a strategy to signal confidence by the management, attempt to increase earnings per share, or deter hostile takeovers.