Stock Repurchases
Hey guys, I've been doing a bit of research recently around ECM fees. There seems to be quite a bit of information around issuances pricing (underwriting fees typically 1-7% pending size of offer and what market the deal is occuring in), I havent however been able to find really anything describing what banks would typically charge to conduct stock re-purchases for clients.
Understand sometimes these can be off-market structured deals, but more commonly done on market. Hoping the forum might be able to provide some insights/ approximate ranges on pricing and deal sizes.
Cheers <3
My bank is UMM and we charge 2 cents per share repurchased. The bank doesn’t make a ton of revenue doing buybacks but it is a strategic maneuver because clients will recognize that if we can buy your shares, we can sell them too. Selling them obviously is the attractive side of ECM given the numbers you mentioned vs the numbers I mentioned
Wow yeah much lower revenue then. So in this instance, if the clients stock was trading around $10, you'd make 2c per trade ($0.02/$10) = 20bps. So you're making 5-30x more selling stock vs purchasing it.
Interesting how that's become such a discount offering relative to the sales.
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