A stock buyback, or repurchase, occurs when a company buys its own shares off the market and therefore reduces the amount of stock outstanding.It can do this in one of two ways: The company can either buy shares at current market prices or tender a fixed-price offer to current shareholders. The primary benefit of a buyback is the price appreciation investors usually see after the transaction. When the supply of stock available to the general market suddenly becomes smaller, each share is worth more.