You are completely right, but very few "startuppish" companies do buybacks. In fact, depending on how you draw the lines very few "startuppish" companies are p

You are completely right, but very few "startuppish" companies do buybacks. In fact, depending on how you draw the lines very few "startuppish" companies are publicly traded. It is possible for a more mature company to have truly reached market saturation in their area. Then they are left with the option of investing in R&D to try to make something truly new, trying to branch out outside of their current area, or distributing the profits to shareholders. These three stategies are not mutually exclusive and a company with sufficient profits can do all three. But both R&D and diverisifying can involving risking the money put into them (potentially even more than you put into them when you consider liability possibilities), so it can make a lot of sense for a mature company to directly enrish the shareholders, and a stock buyback is one way of doing that.