what is treasury stock 
treasury stock refers to previously outstanding stock that was bought back from stockholders by the issuing company the result is that the total number of outstanding shares on the open market decreases treasury stock remains issued but is not included in the distribution of dividends or the calculation of earnings per share eps treasury stock is also referred to as treasury shares or reacquired stock investopedia laura porterunderstanding treasury stocktreasury stock is a contra equity account recorded in the shareholders equity section of the balance sheet because treasury stock represents the number of shares repurchased from the open market it reduces shareholders equity by the amount paid for the stock in addition to not issuing dividends and not being included in eps calculations treasury shares also have no voting rights the amount of treasury stock repurchased by a company may be limited by its nation s regulatory body in the united states the securities and exchange commission sec governs buybacks treasury stock can be retired or held for resale in the open market retired shares are permanently canceled and cannot be reissued later once retired the shares are no longer listed as treasury stock on a company s financial statements non retired treasury shares can be reissued through stock dividends employee compensation or capital raising companies can reacquire shares in different ways the most common methods to buy back their shares include a tender offer or through a direct repurchase a tender offer involves buying shares back from investors above the market price or at a premium companies that do direct repurchases buy shares on the secondary market just like regular investors do 