Share Buyback
A share buyback is the firm purchasing its own stock, shrinking share count and distributing cash without calling it a dividend.
Definition
The company bids for its shares in the market or via tender/ASR. Accounting retires or treasuries the stock. EPS and ROE often rise mechanically. It is a residual capital return when the stock is (claimed to be) cheap and the sheet can bear it.
Why it matters
US large-cap capital return is now mostly buybacks. They are flexible, tax-advantaged for some holders, and easy to pause — and easy to do at the high.
Case
Banks bought back stock in 2021 at 1.8× tangible book and issued or froze in 2023 at 0.8×. The ‘accretive’ math was pro-cyclical.
How to read it
Net issuance (buybacks minus stock comp) is the real shrink. Compare repurchase price to your intrinsic value, not to last week’s VWAP.