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Monday, July 28, 2014 7:39:48 PM
Information about treasury stock and difference between retiring stock and a company buying their own stock
When a company buys back their own shares this is accounted for by lowering the outstanding shares of a company (shares owned by investors) and raising the number of shares owned by the company (treasury stock).
Companies can turn around and sell their treasury stock later on, give it to officers of the company for incentives, simply hold the stock to help prevent hostile take overs, etc.
A company can choose to retire their treasury shares instead of holding the shares for future use (this removes the chance of these shares finding their way back to the open market and increasing the outstanding shares)
In our case, PRPM management is retiring shares that were issued during the lock, so these shares will not be finding their way back into the outstanding shares.
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