What is a buyback and how does it work?

A buyback, or share repurchase, is when a company buys its own shares from the open market or directly from shareholders, reducing the total number of outstanding shares. This increases the earnings per share (EPS) and value of remaining shares, signals confidence, and returns cash to shareholders, often at a premium to the market price, acting as an alternative to dividends.
How it works:
From the market, the company purchases its stock like any other investor through stock exchanges. Then the company makes a formal offer to buy back a specific number of shares at a set price (usually above market) within a given period.