Open Market Repurchase
A share buyback program in which a company purchases its own stock on the open market at prevailing prices over time.
What is Open Market Repurchase?
An open market repurchase is the most common method by which a public company buys back its own shares, executing purchases through brokers on the secondary market at prevailing trading prices over time. The board of directors authorizes a maximum dollar amount or share count for repurchases; management then executes purchases at its discretion, typically under the SEC Rule 10b-18 safe harbor, which limits daily volume (generally 25% of average daily trading volume), timing (first 30 and last 30 minutes of trading), and pricing (no higher than the highest independent bid or last reported sale price). Open market repurchases provide flexibility in timing and pacing but offer no price certainty compared to tender offers, and their gradual nature limits immediate EPS accretion relative to accelerated methods.
Example
During fiscal year 2023, Apple Inc. repurchased approximately $76.6 billion of its own common stock entirely through open market purchases under its ongoing share repurchase program, making it the largest corporate open market buyback in history for that year. Apple executed repurchases under SEC Rule 10b-18 and Rule 10b5-1 trading plans, which allow pre-scheduled purchases during periods when insiders might otherwise be restricted from trading.
Source: Apple Inc. 10-K FY2023