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Comment by bcrescimanno | Hacker News Reader

Theoretically, fewer public shares means that the value should go up (basic supply and demand curve). Apple could then sell their shares at the higher price and effectively earn a return (the reality of how this would happen is more complex--but it all adds up to this basic premise).

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The act of re-issuing the shares would have the opposite effect on supply, causing the price to go back down. You can't create profits by retiring and then reissuing shares.

We aren't talking about re-issuing shares--we're talking about buying them back to be re-issued at a later date. The act of buying them back would shrink the supply and (in theory) drive up the price.

You are ignoring the growth in supply that would happen because of the re-issue.

Presumably, the stock would be reissued at a point where forces other than supply & demand would have had an impact on the price as well. Yes, the additional available shares on the market would cause a dip--but that dip would not necessarily negate the other effects that (could have) impacted the stock price since the buy-back.

I'm not ignoring the effect; I'm just not viewing it in vacuum.

No, you can't buy a stock (causing it to go up) and then sell at the higher price; that would be creating profit out of nowhere. And aren't bought-back shares destroyed?

When a company buys back shares, it can either cancel them or hold them as treasury stock. Treasury stock can then be reissued at a later date at the then market price.

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