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Simple English definitions for legal terms
treasury stock
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A quick definition of treasury stock:
Term: Treasury stock
Definition: Treasury stock is when a company buys back some of its own stock that was previously sold to investors. This stock is no longer considered as part of the total number of outstanding shares, and it doesn't count towards the company's market value. It's like the company is keeping some of its own money in a savings account for later use.
A more thorough explanation:
Treasury stock refers to the shares of a company's stock that have been bought back by the company itself. These shares are considered issued but not outstanding, and are not included in the calculation of outstanding shares.
For example, if a company has issued 1,000 shares of stock and has bought back 100 of those shares, the number of outstanding shares would be 900. The 100 shares of treasury stock would not be counted in this calculation.
Treasury stock can be bought back by a company for a variety of reasons, such as to increase the value of remaining shares or to use as currency for future acquisitions.