The firm was worth $1,000, so shares are currently worth $10 each. If the firm repurchases my shares, it pays out 20 . $15 = $300 and has $700 left, to be split among 80 shares. Thus, the remaining shares are now worth only $700/$80 = $8.75 each. The moral of the story is that when a firm offers to purchase shares for more than they are worth, the nonparticipating shareholders suffer.