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Accelerated Share Repurchase (ASR)

What is an 'Accelerated Share Repurchase - ASR'

An accelerated share repurchase (ASR) is a specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company. The shares are returned to the client through purchases in the open market, often purchased over a period that can range from one day to several months.

Explaining 'Accelerated Share Repurchase - ASR'

Accelerated share repurchases allow corporations to transfer the risk of the stock buyback to the investment bank in return for a premium. The corporation is therefore able to immediately transfer a predetermined amount of money to the investment bank in return for its shares of stock. ASRs are often used to buy shares back at a faster pace and reduce the amount of shares outstanding right away.


Further Reading


Not all buybacks are created equal: The case of accelerated stock repurchases
www.tandfonline.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Why do firms undertake accelerated share repurchase programs?Why do firms undertake accelerated share repurchase programs?
papers.ssrn.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Accelerated share repurchasesAccelerated share repurchases
www.sciencedirect.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Do firms manipulate earnings before accelerated share repurchases?Do firms manipulate earnings before accelerated share repurchases?
www.sciencedirect.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

The accounting and market consequences of accelerated share repurchasesThe accounting and market consequences of accelerated share repurchases
link.springer.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Accelerated share repurchases, bonus compensation, and CEO horizonsAccelerated share repurchases, bonus compensation, and CEO horizons
papers.ssrn.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Repurchases, reputation, and returnsRepurchases, reputation, and returns
www.jstor.org [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Optimal accelerated share repurchaseOptimal accelerated share repurchase
papers.ssrn.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …

Press Release Management around Accelerated Share RepurchasesPress Release Management around Accelerated Share Repurchases
www.tandfonline.com [PDF]
… number of shares outstanding doubles after ASRs, which suggests that companies might be using ASRs to offset accelerated inflation in the number of shares outstanding that … Article. Informed Traders: Linking Legal Insider Trading and Share Repurchases. Konan Chan et al …



Q&A About Accelerated Share Repurchase (ASR)


What happens when a corporation uses an ASR?

The corporation transfers money to the investment bank in return for its shares of stock.

How does an ASR work?

The corporation purchases shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.

Why do corporations use this method?

Corporations use this method because it allows them to transfer risk to the investment bank, while still receiving a premium for their shares. This allows companies to quickly reduce the number of outstanding shares, while also receiving compensation for doing so.

What is an ASR?

An accelerated share repurchase (ASR) is a specific method by which corporations can repurchase outstanding shares of their stock.

Who benefits from an ASR?

Corporations benefit from this type of transaction because they are able to reduce the number of outstanding shares right away.