Companies used to take their profits and either invest in R&D/Capital if they were trying to grow, or give dividends if they were mature. But once C-level compensation became focused on stock options, top management have an incentive to increase the stock price over other concerns. If a company spends every dollar of profit (or cheap loans) on buybacks, they aren't spending money on things that will sustain the business long term like R&D, having funds to weather a downturn, etc. Not that every buyback is a problem. Apple has done buybacks because they felt there stock was the best place to invest their money. It's not like they blew through their cash account just to boost the price.