Buybacks are conducted for various reasons: to return capital to shareholders for which there is no more profitable use; to support the price when it is considered undervalued by the company; to form a package for employee compensation programs. A special case is mandatory buyback from shareholders who voted against decisions affecting their interests.
The economic effect is similar to dividends: both return funds to shareholders. The difference is that buybacks reduce the number of shares in circulation, so earnings per remaining share increase, even if the profit itself does not change. This is important to consider when analyzing the dynamics of per-share metrics.
Buybacks should be evaluated based on price and source of funds. Buybacks at inflated prices or financed through increased debt destroy value for remaining shareholders, while buybacks using free cash flow for undervalued securities have the opposite effect. The announcement of a buyback program alone is not sufficient grounds to consider a security attractive.