BGR, Mainly, because it isn't selling puts, it is selling put warrants. In other words, these warrants become part of the firm's capitalization. But, unlike normal offerings, they do not have to go through the SEC review process. So, it is a way of scamming new capital without opening the books for inspection.
Also, I wonder about why these things provide cash for companies that supposedly have huge cash flow. Are they really cash poor, despite what the books say? Why does MSFT need new capital? It doesn't make sense for the shareholders to take this sort of risk when there is supposedly a huge cash horde on hand.
And, mainly, it is a bull market only winning scenario, high risk, low reward, like all option selling. These cos. will eventually find themselves forced to buy shares at very high prices at the very time they would prefer to use that cash to save what is left of the firm's business. These risks are not explained to the shareholders, who are happy to see that interest income number add to eps like magic.
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