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A buyback has the added effect of reducing the number of shares, increasing their Earnings per Share (EPS). Since EPS is a widely-used metric for valuing a comp

• jariel 7y ago
  In a 'perfect' buyback which was spread across all investors equally -> it's neutral. (Percentage ownership remains the same, cash was transferred to investors) That it won't ever exactly happen that way means some will win/lose depending on their individual situation, but it should be something approaching a wash on average. Again - stock buybacks are not 'windfalls' for investors it's just a normal part of financial operation. The question of how much cash on hand certain businesses should have to have ... is a separate issue. If the government wants to regulate this like they do banks, well, that's an idea, but I don't think it's the best one, but spurning businesses because they did a buyback last year and are otherwise operating normally is definitely not the right approach.
• smabie 7y ago
  EPS isn't used to value a company, it's used to value the price of a single share.