<p>The New York Stock Exchange has a continued listing requirement of 300 shareholders and 200,000 shares. A company will want to consider whether continuing to be traded on a stock exchange is desirable before approaching these limits. </p>

<p><a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-american/MKT_Continued_Listing_Standards.pdf" rel="nofollow noreferrer">LINK to a NYSE reference document.</a></p>

<p>If a company buys back almost all of its shares the last individual or institutional owner (who ever owns the last outstanding share yet to be bought back) will will own all of the equity. This person or institution will control the company. The seller of the last outstanding share will want the highest possible price. If this trade <em>must</em> be done via the company buying it's own shares, because that is the premise of your question, the owner will direct the company to pay the maximum cash amount. The company will generate the maximum cash by liquidating the company. </p>

<p>Definition from Wikipedia... </p>

<blockquote>
  <p>Liquidation is the process in accounting by which a company is brought
  to an end</p>
</blockquote>

<p><a href="https://en.wikipedia.org/wiki/Liquidation" rel="nofollow noreferrer">LINK to Wikipedia article about liquidation.</a></p>

<p>If the last outstanding share can trade for more than liquidation value, there is no reason to liquidate the company. The owner can sell the share to a different investor in order to get the highest possible price.</p>

CC BY-SA 4.0
2024-02-05T23:36:08.953Z
What if the last shareholder wanted to act outside of their self-interest? Would it be legally possible to have the company buy back its remaining stock at a lower price, leaving it some assets with which it can continue to operate? I suppose that could break the company's fiduciary duty to its shareholder but I'm no legal expert.
Nick S
CC BY-SA 4.0
2019-07-13T23:17:42.460Z
2019-08-28T15:37:32.030Z
2019-08-28T15:37:32.030Z
H2ONaCl
<p>Companies can issue new stock (pending board &mdash; and regulatory &mdash; approval) in “public offerings” and stock buybacks are basically the opposite of this. Typically a company will do this in order to keep their stock price above a certain level.  For practical purposes, this simply inflates the voting power of the remaining publicly traded shares &mdash; the company cannot vote its own shares. The company <em>could</em> simply de-issue the shares they purchase, but will often instead hold them as an asset on their books, because they intend to resell them back into the public market at some later date, and its easier for them to do that than to go through the hassle of re-issuing new stock and doing another public offering. Sometimes, companies that are essentially still under the control of the founders &mdash; even though they have done an initial public offering and are now publicly traded &mdash; will do a secondary offering in which the company itself purchases stock from the founders, and sells <em>that</em> stock on the market, rather than actually issuing new stock. </p>

CC BY-SA 4.0
2019-06-09T15:20:20.047Z
2019-06-09T15:20:20.047Z
Bill Clark
<p>I know only Hungarian law. In Hungary you cannot do that. You may buy back at most a limited percent and you have 3 options you have to do in a limited time (typically in one year):</p>

<ul>
<li>you may sell it.</li>
<li>it can be part of employee compensation.</li>
<li>otherwise you must reduce capital by the amount of the owned stocks.</li>
</ul>

<p>In the meantime the equity in the balance sheet is already reduced by the own stocks but booked separately.</p>

CC BY-SA 4.0
2019-07-11T11:07:33.357Z
2019-07-11T11:07:33.357Z
Jónás Balázs
<p>I believe every exchange has a minimum for outstanding shares that's required to be traded. So basically you'd just be going private. Decisions would be made by executives and liabilities would be accepted by the company.</p>

CC BY-SA 4.0
2019-07-11T04:13:15.600Z
2019-07-11T04:13:15.600Z
Yake
<p>Companies occasionally own some of their own stock. A company owning its own stock is actually pretty weird when you think about it. If I own 1% of a business's stock (and therefore own 1% of the business's assets), and the company owns 50% of its own stock, I as a stockholder of the business, indirectly control 0.5% of the business. Through the 0.5%, I own 0.25%. Through the 0.25%, I own 0.125%, and ad infinitum. This adds up to 2% (which makes sense, since if I own 1% out of 50% of the stock, I would own 2% of the business.)</p>

<p>What happens though if a company controls <em>all</em> of its stock. This would mean that the company owns itself. In particular, it isn't really <em>owned</em> by any individuals anymore. The purpose of a public company is to create value for its shareholders, but what does that mean if it owns itself?</p>

<p>Practically, how would this affect things like voting and bankruptcy?</p>

CC BY-SA 3.0
2016-06-10T15:31:36.823Z
The comments under [this question](http://economics.stackexchange.com/questions/12280/if-the-company-were-to-buy-back-all-their-shares-does-that-mean-the-company-wou?rq=1) seem relevant.
Giskard
CC BY-SA 3.0
2016-06-11T22:32:10.427Z
If you want to see what this looks like in practice, spend a bit of time researching Dell. If I remember correctly, the founder of that company recently purchased all outstanding stock and the company is now privately owned.
123
CC BY-SA 3.0
2016-06-12T00:06:45.187Z
@123 I'm not talking about the founder. I'm talking about the company owning all of the stock as company assets.
Christopher King
CC BY-SA 3.0
2016-06-12T04:48:05.397Z
Ah. Got ya. Well, disregard then.
123
<stock-market><property>
What would happen if a company bought back of all of its stock? Would it own 100% of itself?
Christopher King
# What would happen if a company bought back of all of its stock? Would it own 100% of itself?

(Asked by: username_0 on 2016-06-09)

Companies occasionally own some of their own stock. A company owning its own stock is actually pretty weird when you think about it. If I own 1% of a business's stock (and therefore own 1% of the business's assets), and the company owns 50% of its own stock, I as a stockholder of the business, indirectly control 0.5% of the business. Through the 0.5%, I own 0.25%. Through the 0.25%, I own 0.125%, and ad infinitum. This adds up to 2% (which makes sense, since if I own 1% out of 50% of the stock, I would own 2% of the business.)

What happens though if a company controls *all* of its stock. This would mean that the company owns itself. In particular, it isn't really *owned* by any individuals anymore. The purpose of a public company is to create value for its shareholders, but what does that mean if it owns itself?

Practically, how would this affect things like voting and bankruptcy?

**Tags:** stock-market, property

> **Comments:**
> **username_1**: The comments under [this question](http://economics.stackexchange.com/questions/12280/if-the-company-were-to-buy-back-all-their-shares-does-that-mean-the-company-wou?rq=1) seem relevant.  
> **username_2**: If you want to see what this looks like in practice, spend a bit of time researching Dell. If I remember correctly, the founder of that company recently purchased all outstanding stock and the company is now privately owned.  
> **username_0**: @username_2 I'm not talking about the founder. I'm talking about the company owning all of the stock as company assets.  
> **username_2**: Ah. Got ya. Well, disregard then.  

---

## 4 answers

### Answer by username_3 on 2019-07-13. Score: 4

The New York Stock Exchange has a continued listing requirement of 300 shareholders and 200,000 shares. A company will want to consider whether continuing to be traded on a stock exchange is desirable before approaching these limits.

[LINK to a NYSE reference document.](https://www.nyse.com/publicdocs/nyse/markets/nyse-american/MKT_Continued_Listing_Standards.pdf)

If a company buys back almost all of its shares the last individual or institutional owner (who ever owns the last outstanding share yet to be bought back) will will own all of the equity. This person or institution will control the company. The seller of the last outstanding share will want the highest possible price. If this trade *must* be done via the company buying it's own shares, because that is the premise of your question, the owner will direct the company to pay the maximum cash amount. The company will generate the maximum cash by liquidating the company.

Definition from Wikipedia...

> Liquidation is the process in accounting by which a company is brought
> to an end

[LINK to Wikipedia article about liquidation.](https://en.wikipedia.org/wiki/Liquidation)

If the last outstanding share can trade for more than liquidation value, there is no reason to liquidate the company. The owner can sell the share to a different investor in order to get the highest possible price.

> **Comments:**
> **username_4**: What if the last shareholder wanted to act outside of their self-interest? Would it be legally possible to have the company buy back its remaining stock at a lower price, leaving it some assets with which it can continue to operate? I suppose that could break the company's fiduciary duty to its shareholder but I'm no legal expert.  

---

### Answer by username_5 on 2019-06-09. Score: 2

Companies can issue new stock (pending board — and regulatory — approval) in “public offerings” and stock buybacks are basically the opposite of this. Typically a company will do this in order to keep their stock price above a certain level. For practical purposes, this simply inflates the voting power of the remaining publicly traded shares — the company cannot vote its own shares. The company *could* simply de-issue the shares they purchase, but will often instead hold them as an asset on their books, because they intend to resell them back into the public market at some later date, and its easier for them to do that than to go through the hassle of re-issuing new stock and doing another public offering. Sometimes, companies that are essentially still under the control of the founders — even though they have done an initial public offering and are now publicly traded — will do a secondary offering in which the company itself purchases stock from the founders, and sells *that* stock on the market, rather than actually issuing new stock.


---

### Answer by username_6 on 2019-07-11. Score: 0

I know only Hungarian law. In Hungary you cannot do that. You may buy back at most a limited percent and you have 3 options you have to do in a limited time (typically in one year):

* you may sell it.
* it can be part of employee compensation.
* otherwise you must reduce capital by the amount of the owned stocks.

In the meantime the equity in the balance sheet is already reduced by the own stocks but booked separately.


---

### Answer by username_7 on 2019-07-11. Score: 0

I believe every exchange has a minimum for outstanding shares that's required to be traded. So basically you'd just be going private. Decisions would be made by executives and liabilities would be accepted by the company.


---

