What is a normal course issuer bid, and how might it affect the price of a stock? (February 14, 2002)

  A company makes a normal course issuer bid when it wants to buy back its own shares. The bid is filed with securities regulators outlining the amount of stock the company proposes to buy over a given period of time. The company is not bound to do so, and typically the bid will be for more stock than is actually repurchased. Consequently, when you see a reference to a normal course issuer bid, what you are dealing with is a repurchase where the company intends to cancel the shares. Such action can increase share value as there will be fewer outstanding after the repurchase, so it can be seen as a good thing. On the other hand, the money used for repurchase is no longer available for capital investment.


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