I do not understand.

If the compagny spends 500 k$ to buy back 500 shares, is not its new value 1000 k$ minus 500k$, i.e. 500 k$ ?

Then each remaining share should still value 1k$.

"Its shares should be worth less than before"

This seems misleading. The shares should only be worth less *if the number of shares are fixed*. which they aren't, in a buyback. When the company buys back half those shares, those shares stop existing. The 1000 share company only has 500 shares outstanding, post-buyback.

A company worth $500,000 with 500 shares outstanding will have a per share price of $1,000. The same company with 1,000 shares has a per share price of $500. 1/2

i've been hearing about these stock buybacks for quite some time now.

thanks for actually explaining why that was the case.

the bigger question i have is if a company cannot buy back its own stock, how does it regain its decision making capability from its investors?

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