I wasn't too concerned about secondary effects. Maybe I should have been, but I believe the way you consider it is incomplete as well, failing to account for t

I wasn't too concerned about secondary effects. Maybe I should have been, but I believe the way you consider it is incomplete as well, failing to account for the reduction in the company's liquid assets (and thus shareholder equity or ability to reinvest assets to grow) due to the buyback. Suppose a company has 1T market cap, 10 billion shares at $100/share, and wants to buy back 1% or 100 million shares for $10 billion. They have a cash hoard of 100 billion, and another 100 billion in other assets. What happens, ignoring stock market changes from the buy back or reaction (i.e. hypothetically, this couldn't happen, but to isolate the effects assume OTC buyback at current market price, and no public announcement)? Before: shareholders get a share of future potential profits. To avoid adding more hypothetical numbers for dividends, I'll simply index this notional dividend stream to 1, or 100%. In parallel they have a claim on the company's assets: $20/share worth. After: shareholders get an increased share of future potential profits: 100/99, or roughly 1% more than without the buyback. In parallel they have a claim on the company's assets, but those assets have dropped the $20/share equity by 5% to $19/share, evaporating $1/share in equity (conveniently in this example, outstanding shares and buyback dollar amount are equal). Furthermore, the company has lost 5% of its assets, and even more than that percentage of its liquid assets, that it could've used to grow the company. What effects dominate? That depends on how investors see future investment by the company as a driver of future profits, doesn't it?