The reason a company sells stock is because when they need money, sometimes it is easier to sell stock to raise cash than to try and borrow from the debt markets.

Say you need to add cash to the balance sheet for any number of reasons, buy a new plane, refurb a HQ building or just shore up financials for the future. Its easier to just sell some stock, take the cash and use the money vs negotiating a debt deal. Isnt it easier to just use cash to buy a new lawn mower than to try and finance it and negotiating terms?

Well why not just issue additional stock? Typically companies are constrained by shareholder agreements that limit the number of outstanding stock. If there are 100 shares outstanding and the company owns 50 and investors own 50, the company can sell 20 to raise some money but 100 are still oustanding, the balance is now just 70/30. The company cannot add 20 to create 120 shares outstanding as this dilutes the existing shareholders. It is the same reason that we cant just print more money from the FED. It dilutes the existing dollars and creates inflation.

disclaimer: i fully oppose the company engaging in buybacks and am not defending the company but there is a logic to why shares are sold and then bought back. Unfortunately this time, the company violated Gordon Gecko’s #1 rule. We sold low and bought high...