Comment by quickthrowman

Issuing new shares is dilutive.

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Stock buyback example:

There are 10 shares of ABC Corp, it has a market cap of $100. Each share is worth $10.

ABC corp buys back one share and destroys it, leaving 9 shares.

$100/9 shares=$11.11 per share.

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Dilution example:

There are 10 shares of ABC Corp, it has a market cap of $100. Each share is worth $10.

ABC corp needs $10 so they sell one additional share which the board has authorized. There are now 11 shares.

$100/11 shares=$9.09 per share.