BP Shares

joebob

I read this morning that BP is to launch a share buy back what exactly does this mean ?

Voyager2002

joebob wrote: »

I read this morning that BP is to launch a share buy back what exactly does this mean ?

What it says: they will use some of their spare cash to buy some of the shares that are outstanding (and liquidate them). In practice this is likely to mean a small increase in share price in the short term.

joebob

Does that mean an increase in dividends.

le_loup

Could do. If the dividend amount stays the same and there are fewer shares in existence the amount per share will increase.
However the usual effect is to increase the value of the remaining shares so that the CEO gets a bigger bonus because that will be based upon the difference between the share price when the contract was made and the price when the bonus is paid.
Funny old world.

joeypesci

Lucky I read this. I have a few left since I bought when they were down to £3.90. Been holding onto them for years. Now and then they'd hit £5, like today. Was thinking of selling to make a small profit but might hold onto them now.

Voyager2002

joeypesci wrote: »

Lucky I read this. I have a few left since I bought when they were down to £3.90. Been holding onto them for years. Now and then they'd hit £5, like today. Was thinking of selling to make a small profit but might hold onto them now.

Funny... if the price rise today is because of the buyback plan then I would see it as a reason to sell.

joeypesci

True. Wasn't sure if the buy back had happened yet.