A company will buy back shares of its stock to increase shareholder value by decreasing the number of shares. Each share represents a small stake in the underlying company. A portion of the company’s profits may then be distributed to all shareholders in the form of dividends. When the number of shares is reduced, the shareholders will receive a greater share of the profits.
Stock buybacks are used to increase shareholder value. The move increases demand for the company’s stock, which also raises the market price. Stockholders that retain their shares will see their value increase. Sounds good, but what are the downsides? Find out here.
A reverse stock split is a corporate action that consolidates the number of existing shares into fewer, more expensive shares. The company can reverse split the stock by any multiple, such as 1-to-2, 1-to-5, or 1-to-10.
You will often see online messages and articles talking up the benefits of buying the dip, but is it a good investment strategy? Learn more about this phrase and what it means in practical terms.
Investors may have trouble managing their finances in a bear market. The pressure to sell can be overwhelming, but following the trend can also lead to a decline in profits.
Everyone usually benefits from a bull market. Buying and selling stock during this time can lead to a high rate of return. However, the expansion will only last so long.
The Russell 2000 Index is a useful alternative to other well-known indices. It provides a snapshot of what is happening to smaller publicly traded U.S. companies.
Preferred stock has the characteristics of common stocks and bonds, which mean shareholders can rightfully benefit from a company’s profitability but can’t exercise their voting rights.
The Standard and Poor’s 500 is a stock market index tracking the performance of 500 large companies listed on stock exchanges. Contrary to popular belief, these are not the 500 biggest companies but arguably the 500 most important companies.