Although they are not necessarily the reason that companies issue a buyback, there are a few fundamental metrics that will change when a company issues a stock buyback.
Its market capitalization decreases – Market capitalization is calculated by dividing the number of a company’s outstanding shares by the company’s price per share. In this way, by definition, reducing the number of outstanding shares will reduce a company’s market capitalization.
Its earnings per share increases – Conversely, because a stock buyback reduces the number of outstanding shares in the market, a company’s earnings per share will rise.
Book value per share decreases – since outstanding shares is the divisor for calculating a company’s book value per share, having fewer outstanding shares means that the accounting value of each share is less.