please mr cook, can i have a dividend?, page-12

I'm sorry, I don't follow the logic that a share buy-back doesn't benefit existing shareholders. Could someone please explain the logic behind this?

My thoughts on share buy-back are as follows.
If there are 100 million shares on issue, the share price is $1, but the actual intrinsic value of that share is $2. In this case the market capitalisation would be $100 million, yet the intrinsic value = $200 million.

So commencing a share buyback of say 20 million shares at $1. You would reduce the cash by 20 million (also the value) so the new intrinsic valuation = 180 million, but there are now only 80 million shares on offer. Therefore new instrisic value per share = 180/80 = $2.25 (up from $2). By this logic, whenver a share is undervalued, all shareholders will benefit. And vice versa, to buyback an overvalued share, you will destroy shareholder value.