Good question about buybacks increasing liquidity.
Liquidity means that you can sell or buy a large number of shares quickly without changing the price.
Suppose you've got a company with a very small number of shares changing hands each day. That means that anyone who wants to sell a large number of shares is going to have to spread his sales out over many days or lower the price substantially to attract more buyers.
If the company has an active buyback program, the company will step in and buy those shares with little downward pressure on the stock.
Buyback programs do not create liquidity for buyers because the company is not allowed to sell shares that way.
I hope this helps.
With the price of Eyetech depressed right now, the company should be buying back shares.
I don't see why anyone at EYET would even think about a buyback, this is a start-up that has not gained profitablity yet. They went IPO a little over a year ago to raise cash to develop the business. This cash is best used to continue to develop the business that can lead to profits in the future. No business at this early stage of development would even consider a buyback.