Buybacks create artificial demand for the stock, pushing prices higher (and giving the company a tool to support the stock when the price declines). Lower shar

Buybacks create artificial demand for the stock, pushing prices higher (and giving the company a tool to support the stock when the price declines). Lower share count also means higher price in the long term, relative to the alternative scenario of paying dividends. This is relevant for employees with stock-linked compensation. The dividend alternative may require higher cash compensation for employees and create retention issues (not that stock compensation is free, mind you). And of course lower share count means higher earnings per share, making it easier for management to attain targets and beat forecasts. One aspect that can hurt long-term investors is that the company will overpay for its shares when the stock is overvalued.