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Q on regulatory timing of Company share repurchase?


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Guys,

I have a question regarding an example public company that has a plan in place to repurchase its own shares.  When can they mechanically enter the market and repurchase the shares over a given month or a quarter?  

I know there are limits like they can't repurchase more than 25% of the average daily volume..  and there may be other rules that I don't know.

  1. Do the regulators require that they buy back shares via some daily plan and then set it to autopilot?  Like $100MM total, and $5MM per day until the $100MM limit is hit.
  2. Or, does the company have the flexibility to wait until their company stock traded price goes down on a given day, and they can load up on the repurchase that day, and then stop buying for a week or two and then do it again?

If you guys have any other interesting thoughts or strategy on what public companies do with buy backs, please share.  I would love to learn a little more about the low level weeds of how the companies execute the share repurchases [buy backs.]  

 

Thanks.

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You can either have a discretionary buyback, which is subject to blackout restrictions. IE 2 weeks before EOQ-a few days after subsequent ER. Stuff like that. Or you can have a 105b type which allows consistent repurchases within the guidelines of normal trading rules, IE nothing for first 15/30 last 15/30 of daily trading. 

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Excellent info thank you.  It sounds like as long as they stay within the rules, they have some flexibility on timing of purchase, etc.  It does permit them to be somewhat opportunistic about their repurchases.

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