Apple announced a $110 billion stock buyback - but what is a share repurchase?

After this news, their stock climbed almost 6% post market close.

But for those new to investing, you might be wondering what a share buyback is and the purpose of doing it for public companies.

Thanks to our learning team, here are some key points to help get your head around share buy backs/share repurchasing:

1. A share repurchase means that a public company buys back its issued shares from the market.

2. Two common types of repurchase: direct repurchase and offer repurchase.

3. Public firms repurchase their shares for a variety of reasons, including to raise the stock price when undervalued, to resolve the crisis caused by a hostile takeover or merger, to give shareholders a better return, and to optimise the capital structure.

4. When a share repurchase is executed at the right price with good timing, it may lift the stock price, but not for certain. Investors still need to do an in-depth analysis before buying the company's shares.