Treasury stock
Treasury stock are shares that have been issued by a firm, but are being kept ‘in treasury’ - ie they are being kept for possible subsequent reissue.
Treasury stock are shares that have been issued by a firm, but are being kept in treasury'. This just means they are being kept for possible subsequent reissue. The reasons vary. It might be that the firm has done a share buyback (to boost earnings per share and return cash to shareholders) but doesn't want to cancel the shares it is buying back. Or perhaps the shares are being kept to one side to be used as part of an employee remuneration deal later.
These treasury shares don't carry voting rights and don't pay dividends and should not normally be used in ratio calculations such as earnings per share. The main advantage of them is that the company has already gone through the administrative hassle of issuing them. This makes a subsequent issue cheaper and faster than a full issue of brand new shares, which is the only option once shares are cancelled.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Tesla and Alphabet announce results – should you invest in Big Tech?
How profitable are the world’s biggest tech companies? We share the latest so far this earnings season.
By Katie Williams Published
-
How working part-time in retirement could boost your pension by £87,000
Easing into retirement by working a few days a week could add thousands to your pension pot. We crunch the figures to see how working part-time can boost your pension po
By Ruth Emery Published