Buying shares in a company after you quit
"US law dictates that you cannot buy / sell shares in a company you   work for except during open trading windows. I understand lockout   periods when you're in a company but what about after you quit? There's no such law. Trading lockouts are imposed by companies themselves to avoid the complexities of identifying ""insiders"". For large companies it sometimes is easier/cheaper to assume everyone is insider instead of imposing internal data flow controls and limitations. For such companies, their internal policies would also manage how the employees who are leaving should be treated." Insider trading is when you buy or sell an investment based on material, non-public information that gives you an unfair advantage over the rest of traders in that market.  Working for a company is one way that you might have such information, but whether it is insider trading is not contingent on you working there. You could use that information a long time after leaving the company. You don't even need to have worked there. If a friend/relative gave you non-public information because THEY work there, it is still insider trading.
Buying back shares is an indication that the company does not believe that there is justification to invest in production, employee training, or technology. In the end, what it mostly does is pump up the share price, which very directly pumps up the value of share-based compensation that the CEO has.  On mergers and acquisitions, I don't have the time to look for the source right now, but I've read a few reports that showed that the vast majority of mergers and acquisitions actually erodes the value when compared to the two separate companies. They cite reasons like overblown expectations, clash in company cultures, and manipulations up top as a reason to do this. On paper, they all sound great, but these are very dificult things to operationalise which only the very best management teams manage to work out.  The above parties are part of the real economy as long as they are companies that produce goods or services, which is often the case. It contrasts with the paper economy which is the world of bonds, hedge funds, share markets, and commodity markets. The money moving around in this world seldom makes a diference to anybody but the directly involved. The share market is a classic example of this. Although the value of stocks may be high, most people who own the stocks don't actually have more money to spend, unless, obviously they sell the shares. The value is on paper until it is transacted, and can collapse like a house of cards.   The real economy is much more stable and resiliant, and has a large impact on the majority of the population. It won't vary hugely from one month to the next like the stock market can.  I don't have any educaton in economics other than curiosity on how these things work. I read Krugman's blog and generally google any term or concept that tickles my fancy. I also partake in quite a few discussions here on reddit that frequently prompt me to go investiage some more. I don't proport to be some sort of expert, but I do have concise ideas of how things work, and have a very strong bias of looking at evidence and fact-based postulations rather than ideology. This is only one of a series of questions your friend needs to understand. They will also need to know what happens to: vacation balances; the vacation earning schedule; retirement fund matching; the pension program; all the costs and rules regarding health, dental and vision;life insurance amounts. Some of these can be changed immediately. Some will not be changed this year because of IRS regulations. Everything can be changed by the next year. But there is no way to know if they will change a little a possible or as much a possible. It will depend on if they are buying the company, or if the company is going out of business and the new company is buying the remnants. They may also be essentially terminating the employees at the old place, and giving them the first opportunity for interviews. If they are essentially quitting they will not have to continue paying into the plan. The bad news is that their last day of work is also probably their last day to incur expenses that they can pay for with the flexible plan. If They are being purchased or absorbed the company will likely make no changes to the current plan, and fold them into the plan next year. I have been involved with company purchases and company splits, and this is how it was handled. "It is not clear when you mean ""company's directors"" are they also majority owners.   There are several reasons for Buy;   Similarly there are enough reasons for sell;   Quite often the exact reasons for Buy or Sell are not known and hence blindly following that strategy is not useful. It can be one of the inputs to make a decision." Yes, you often can buy stocks directly from the company at little or no transaction cost.  Many companies have either a Dividend Reinvestment Plan (DRIP) or a Direct Stock Plan (DSP).  With these plans, you purchase shares directly from the company (although, often there is a third party transfer agent that handles the transaction), and the stock is issued in your name.  This differs from purchasing stock from a broker, where the stock normally remains in the name of the broker. Generally, in order to begin participating in a DRIP, you need to already be a registered stockholder.  This means that you need to purchase your first share of stock outside of the DRIP, and get it in your name.  After that, you can register with the DRIP and purchase additional shares directly from the company.  If the company has a DSP, you can begin purchasing shares directly without first being a stockholder. With the advent of discount brokers, DRIPs do not save as much money for regular investors as they once did.  However, they can still sometimes save money for someone who wants to purchase shares on a regular basis over even a discount broker. If you are interested in DRIPs and DSPs and want to learn more, there is an informative website at dripinvesting.org that has lots of information on which DRIPs are available and how to get started. The answer to your question as asked is no.  Call options, even those issued by the company, cannot create new shares unless they are employee stock options. Company-issued warrants, on the other hand, can create new shares. "Chris - you realize that when you buy a stock, the seller gets the money, not the company itself, unless of course, you bought IPO shares. And the amount you'd own would be such a small portion of the company, they don't know you exist.  As far as morals go, if you wish to avoid certain stocks for this reason, look at the Socially Responsible funds that are out there. There are also funds that are targeted to certain religions and avoid alcohol and tobacco. The other choice is to invest in individual stocks which for the small investor is very tough and expensive. You'll spend more money to avoid the shares than these very shares are worth.  Your proposal is interesting but impractical. In a portfolio of say $100K in the S&P, the bottom 400 stocks are disproportionately smaller amounts of money in those shares than the top 100. So we're talking $100 or less. You'd need to short 2 or 3 shares. Even at $1M in that fund, 20-30 shares shorted is pretty silly, no offense.  Why not 'do the math' and during the year you purchase the fund, donate the amount you own in the ""bad"" companies to charity.  And what littleadv said - that too." The holders of the shares have to agree to sell them to management in a share repurchase.  Typically, share repurchases are done in the open market, causing market activity to increase the share price marginally.  This is how the company returns the value to shareholders.  The company could also negotiate a price with a mutual fund, or founder, for a large block.     If they get close to the point of purchasing all outstanding shares, this would be exactly the same as the management of the company taking the company private, buying out all existing shareholders.   To prevent a single holdout from keeping say the very last share for one million dollars or the like on the open market, they would generally propose to the board of directors the buyout terms with a price per share, and most corporate charters are written such that the directors' vote binds minority shareholders to buyout or merger decisions.  Michael Dell famously took Dell Computer private in 2013, raising external money to offer a fair price to the board, which accepted it, letting him take it back to private status. "Yes, this is possible with some companies. When you buy shares of stock through a stock broker, the shares are kept in ""street name.""  That means that the shares are registered to the broker, not to you.  That makes it easy to sell the stock later.  The stock broker keeps track of who actually owns which shares.  The system works well, and there are legal protections in place to protect the investors' assets. You can request that your broker change the stock to your name and request a certificate from the company.  However, companies are no longer required to do this, and some won't.  Your broker will charge you a fee for this service. Alternatively, if you really only want one share for decoration, there are companies that specialize in selling shares of stock with certificates.  Two of them are giveashare.com and uniquestockgift.com, which offer one real share of stock with a stock certificate in certain popular companies.  (Note: I have no experience with either one.)  Some companies no longer issue new stock certificates; for those, these services sell you a replica stock certificate along with a real share of electronic stock.  (This is now the case for Disney and Apple.) With your stock certificate, you are an actual official stockholder, entitled to dividends and a vote at the shareholder meeting. If this is strictly an investment for you, consider the advantages of street name shares: As to your question on buying stock directly from a company and bypassing a broker altogether, see Can I buy stocks directly from a public company?" What are my options, if any, in how to deal with a buyout that forced me to sell, and accept cash only for my Florida USA company shares? Options are limited; I will never understand the logic behind this. If you buyback shares instead of funding pension liabilities... those liabilities are still there and any serious investor will factor that into the companies stock price.   I guess it's just easier to be a consistent dividend grower and cater to that audience if your outstanding shares decrease. "I can see two possibilities. Either a deal is struck that someone (the company itself, or a large owner) buys out the remaining shares. This is the scenario @mbhunter is talking about, so I won't go too deeply into it, but it simply means that you get money in your bank account for the shares in question the same as if you were to sell them for that price (in turn possibly triggering tax effects, etc.). I imagine that this is by far the most common approach. The other possibility is that the stock is simply de-listed from a public stock exchange, and not re-listed elsewhere. In this case, you will still have the stock, and it will represent the same thing (a portion of the company), but you will lose out on most of the ""market"" part of ""stock market"". That is, the shares will still represent a monetary value, you will have the same right to a portion of the company's profits as you do now, etc., but you will not have the benefit of the market setting a price per share so current valuation will be harder. Should you wish to buy or sell stock, you will have to find someone yourself who is interested in striking a deal with you at a price point that you feel comfortable with." "The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid).  If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of ""bearer"" shares, and finally creating markets where such shares were traded.  On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money.  You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight.  I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...)  I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were ""too big to fail"" and had to be bailed out at the taxpayer's expense. ""Heads we win, tails you lose"", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant." What most respondents are forgetting, is when a company allows its employees to purchase its shares at a discount with their salary, the employee is usually required to hold the stock for a number of years before they can sell them. The reason the company is allowing or promoting its employees to purchase its shares at a discount is to give the employees a sense of ownership of the company. Being a part owner in the company, the employee will want the company to succeed and will tend to be more productive. If employees were allowed to purchase the shares at a discount and sell them straight away, it would defeat this purpose. Your best option to decide whether or not to buy the shares is to work out if the investment is a good one as per any other investment you would undertake, i.e. determine how the company is currently performing and what its future prospects are likely to be. Regarding what percentage of pay to purchase the shares with, if you do decide to buy them, you need to work that out based on your current and future budgetary needs and your savings plan for the future. Once you own no shares for 31 days, it's game over. Even though the accounting has wash sales to consider, in the end, gains and losses all cancel to one net position of break even, gain or loss.  It's when there are shares remaining at the end of a period of time that the wash sale rules really impact the numbers. You might be right about that, but your previous posts don't say that.  In just the last one you said:  &gt;Because buyback decreases shares outstanding it **also decreases the company's total future dividend payouts as well**  This is indicating that you believe there is a difference somehow, no?