I think in this discussion two things are being confounded: 1) The mechanism by which you move money in/out of a company. At the moment of the transaction you

I think in this discussion two things are being confounded: 1) The mechanism by which you move money in/out of a company. At the moment of the transaction you add/remove X$ in cash to the company and add/remove the same X$ in shareholders. You could turn around and use that same cash to do the opposite transaction and be back to square one. That's what I mean by the transaction being neutral to shareholders. 2) The situations in which you are incentivized to do these share issues/buybacks and their long term impacts. If you believe that your company is currently valued at Y but is really worth 10Y then you want to raise as little as possible to get a bigger share of that 10X increase in value. Conversely if you think your share is overpriced you want to raise as much as possible because you are paying it with inflated shares. The transactions themselves are neutral to the shareholders at that point in time, they're just ways of moving cash in/out of the company, you do them more or less and in one direction or another depending on your evaluation of how mispriced the company is.