The only situation where buybacks are generally considered a good idea is when the company is undervalued and has sufficient profitability and cash reserves to

The only situation where buybacks are generally considered a good idea is when the company is undervalued and has sufficient profitability and cash reserves to buy back a portion of outstanding stock. This shores up the share price in the short term, and once the company is trading at higher values it can raise much more money on additional stock offerings since investors are already willing to pay a premium for the scarcer shares. Unfortunately, asking a CEO whether their company is undervalued is like asking a barber if you need a haircut. That's how you run into situations where companies with absurd cash reserves like Apple and Microsoft are buying back their own stock, but for what purpose? They already have boatloads of cash! They don't need to raise any more! There are plenty of simple options to deal with this. A law could require stock buybacks to be matched with dividends or taxed at a punitive rate. Alternatively, it could be mandated that buybacks require a majority of shareholder votes, thereby aligning shareholder needs with company activities.