First, we should understand what is share buyback, and what the pros and cons for doing it. Share buyback happens when the company itself decided to buyback its company shares. This will lead to a decreasing share outstanding, where the shares issued to public will be slightly lesser.

The benefits of buying back the shares is to decrease the share outstanding, making supply lesser than demand, causing retail investors willing to buy the shares at a higher price, hence pushing the share price up. Besides, when the management decided to buyback the company shares, this mainly happened when the management sees that the current share price is still undervalued, hence buying back the shares only brings benefits, but not any risks.

Furthermore, since share outstanding has been decreased, it will also increase Earnings per share (EPS) even if the company is earning the same profit as last quarter. Since EPS is increased, subsequently the PE ratio will also drop, causing the share price to be cheaper and more reasonable. In short, it will attract more investors to buy the company shares at a discounted price.

On the other hand, the disadvantage of having to buyback the company shares may cause investors to worry about the company’s future. This is because the company is currently using their company cash to buyback the shares, investors might think that maybe the company has decided to not expand their business further, and stop growing. Besides, investors might also be worry about the economy, that if the economy take a sharp turn downwards, the company may end up in an awkward situation where it has limited cash to work their way out.

In short, we can see that share buyback has significantly more pros than cons, but that does not eliminate the probability of the management buyback the shares with ill intention. Hence, investors need to do more research in order to show that the company’s decision is correct and may potentially bring more benefit to shareholders.

首先，我们必须明白什么是回购股份，而他有什么好处和坏处。回购股票会发生主要来自于公司本身买回自己的股份。这也同时会造成公司所发出的股票数量减少，而公开市场中的票的会就此减少。

那当股票的数量减少时，就会造成供不应求，投资者便会选择在比较高价的情况下买进公司，从而提高股价。除此之外，当管理层决定回购股票时，他们通常都觉得现在的股价十分被低估，所以现在回购也只会给公司的未来带来好处，而没什么坏处。

不但如此，既然股票数量被减少了，但自然而然每股净利便会增加，即使利润和上个季度一样，我们也会看到每股净利的增长。那既然每股净利增长了，本益比也自然会被拉低，那就会显示现在的股价相对来说比较便宜和合理。这也会造成更多的投资者愿意买进公司的股份。

另一方面，回购股票的坏处可能会导致投资者担心公司的未来。这是因为公司是利用公司里面的现金而回购股票的，投资者便会担心公司比较注重股价，而忽略了把自己的公司规模继续扩大。此外，投资者也会担心世界经济，当经济急转下跌时，公司会不会犹如驶进了死胡同般，没有足够的现金应对。

总结，我们可以看到回购股票的利是多于弊的，但这并不能肯定管理层没有不好的意图。所以，投资者必须多阅读以及多研究公司的背景，以抉择公司管理层的决定是否正确，而这个决定会不会给股东带来更好的回酬。

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