Buybacks and special dividends are economically equivalent. Buybacks allows individual investors to either sell or hold. The majority of investors would usuall

Buybacks and special dividends are economically equivalent. Buybacks allows individual investors to either sell or hold. The majority of investors would usually prefer to hold at a given point in time (or at least would prefer a choice of when to realise their gain), so unless the sum is so big that a buyback is not practical, it is usually preferable from an investor perspective as it lowers average friction costs. In some jurisdictions buybacks may also be more tax efficient for some investors than special dividends (and this may be especially true for senior executives who make the decision on which to do), but that's not the case everywhere or for all investors (some may have a tax preference for dividends).