How does the company do a stock buyback?

A stock buyback is done through either of the below two ways:

  • Open market: The company buys back its shares from the secondary market
  • Tender offers: Shareholders can submit or tender portions of their shares within a stipulated time

Note: By submitting their shares through a tender offer, shareholders can avail the opportunity to earn a premium, as companies usually compensate investors for tendering their shares.