Andiamo Corp. (ANDI)

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What happens when a company buys back its shares?

By Investopedia Staff | Updated January 4, 2018 — 6:29 PM EST

When a company performs a share buyback, it can do several things with those securities.

1. It can reissue the stock on the stock market at a later time. In the case of a stock reissue, the stock is not canceled, but is sold again under the same stock number as it had previously.

2. It may give or sell the stock to its employees as some type of employee compensation or stock sale.

3. Finally, the company can retire the securities.In order to retire stock, the company must first buy back the shares and then cancel them. Shares can not be reissued on the market, and are considered to have no financial value. They are null and void of ownership in the company.