> Buybacks create a tendency toward higher share prices, but only while they continue. Buybacks increase the share price because you have a company that is wor

> Buybacks create a tendency toward higher share prices, but only while they continue. Buybacks increase the share price because you have a company that is worth (for sake of argument) the same as it was worth before, except now there are fewer shares available. A fixed market cap divided by fewer shares equals a higher share price. In the limit case imagine buying back all but 1 share. Now that 1 share represents the entire value of the company, so the share price would equal the market cap.