Given the volatility in the markets, numerous public companies
are considering repurchasing shares as a means of improving the
market price of a company's stock. Historically, a
company's stock price increases from 1-3% when repurchases are
announced and generally this price increase does not dissipate over
time. See, for example, this SEC 2020 study at page 39. Set forth below is
a brief overview of various considerations with respect to
conducting an open market stock repurchase.
Board approval – The Company's board
of directors should approve the repurchase program, which should
include approval of either the maximum number of shares (or
percentage of outstanding shares), or a maximum dollar amount of
shares to be repurchased, and the intended method of repurchase,
including any price or time limitations. The board should consider,
among other factors, the impact of the repurchase on the
Company's cash reserves, the Company's capital needs, and
whether there is
