Buyback

The buyback of a share is a business buying back its own shares from outsiders.

There are a few reasons to do this. The first is that a shareholder is part owner, even if a very small part. If the business wants to merge, make major changes, or even just take a risk (say, try producing a new product), they might not want a lot of outsiders with voting power. So, they start buying their shares back from the shareholders. The shareholders get their money back (and maybe some profit), and the business pulls all the control back inward again.

There are also financial reasons. The business might feel that their stock is being undervalued. Some of their shareholders just aren't seeing their potential, and they're selling the stock for less that what it's worth, dragging down the value of the business as a whole. The business decides that, if their shareholder isn't going to take good care of the shares, it'll take them back, and hold them close until an investor who will appreciate them can be found.

Lastly, the business might decide that buying back shares is preferable to paying dividends. If the economy starts to looks shaky, the business might not be able to pay dividends to its investors. If they stop paying dividends, the shareholders will likely sell the shares, and fast. They might sell low too, and lessen the value of the business. So the business decides to be proactive, and grab the shares back before it runs into that situation.