Herborium Group Inc (HBRM)

[gordonhoochie]

EVERYONE SHOULD READ THIS:

[What is a 'Buyback'?

-A stock 'buyback' is the act of purchasing shares from the open market by the company. These shares were once issued in the initial formation of the public company, and/or as a means of raising capital. To increase share value and entice investors to purchase and hold a position, the company can buy back shares. This is essentially the reverse of dilution, and has a very positive effect on the stock. While a rather rare occurrence, successful companies that value their shareholders have been known to roll profits into a buyback program.

Penny stock investors must, however, be wary of scams that promise a stock buyback, while in reality the company uses the "good news" to sell shares. Often times, the press release will state that the company plans to buy back "up to" a certain amount of shares. "Up to" could mean the company is only going to buy one single share! While the hype of a stock buyback on a scam stock could provide ample opportunity for a profitable trade, long term investment in this case is not a good idea. Again, if the company is promising things that seem too good to be true, beware.