The value of a company’s shares is the sum of its assets and its expected future earnings, both divided by the number of shares. The assets are a known quantity and do not fluctuate much in value, but the expected future earnings may. When a company makes a buyback, it is changing the constituent parts of its shares’ value to be less asset(ie. cash) heavy and more expected future earnings heavy. If the expected future earnings were underestimated for some reason, the result will be a more share than if the company had kept its cash. If OTOH the future earnings were overestimated, the value of the share will decline more than if the company had kept its cash.