Definition - What does Buyback mean?

Buyback is when a person or an organization repurchases something that it is selling. The term buyback is commonly associated with stocks. Corporations frequently participate in buybacks or the repurchasing of their own stocks. They do this in order to reduce the number of outstanding shares on the market or to reduce the threat of certain shareholders getting too much control over the company.

Justipedia explains Buyback

Buyback exists because companies often realize that it is better for them to repurchase something they once were selling. This can happen if the company's circumstances change or if the assets or products they were selling change. Another example of a buyback is in sports when teams include a "buyback clause" upon their selling of players to other teams. Teams will include this clause in contracts in case they realize later on that they would like to repurchase the player. Typically this happens if the player's performance has been impressive. The buyback clause is only applicable under the terms stated in the contact between the two teams

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