Companies may repurchase their own stock at the open market, usually common shares, for many reasons. In theory, the buyback should not be a short term fix to the stock price but a rational use of cash, implying that a company’s best investment alternative is to buy back its stock. If earnings stay constant, the reduced number of shares will result in higher earnings per share, which all else being equal, should result in a higher stock price. Normally these purchases are done with free cash flow, but not always.