Treasury Stock
Shares a company has repurchased from the open market and holds rather than retiring or reissuing.
What is Treasury Stock?
Treasury stock consists of a company's own shares that have been bought back from shareholders and are held by the company itself. These shares are no longer outstanding, do not receive dividends, and do not carry voting rights. On the balance sheet, treasury stock is recorded as a negative number in the equity section, reducing total stockholders' equity. Companies repurchase shares to return capital to shareholders, offset dilution from employee stock options, or signal confidence in undervalued stock. Treasury shares can be reissued for acquisitions or employee compensation plans, making them a flexible tool for capital management.
Example
Apple has repurchased over $700 billion worth of its own shares since 2012, accumulating a massive treasury stock balance that has reduced its share count from about 26 billion to under 15 billion — significantly boosting earnings per share even when net income grows modestly.