The financial accounting term reacquisition of shares refers to a process whereby a corporation buys back shares of its common stock from existing shareholders. When a company reacquires shares of its own stock, a process that is also known as a stock buyback, these securities are classified as treasury stock unless retired by the company's board of directors.
Companies will issue capital stock to raise funds that can be subsequently used to expand business operations and create additional shareholder value. Companies can choose to subsequently buy back shares from the market and will reacquire stock for a number of reasons, including:
While it's fairly common for a company to repurchase some of its outstanding shares of stock, it can also decide to "go private." For example, in October 2013, Michael Dell and Silver Lake Partners entered into an agreement to repurchase all of Dell Computer's outstanding shares.
When a company repurchases shares of common stock, they can be retired by the board of directors or held as treasury stock, which allows the company to reissue the shares in the future. Companies that repurchase shares are not acquiring an asset, and they are not entitled to shareholder benefits such as voting rights or dividends.