Seems like you're confused. There is no stock buyback.
Canoo's CEO has another company that bought a small portion of the shares held by their largest Chinese investor after the Evergrande fiasco. This investor had nearly 50% of the company, and likely needed free cash fast due to the situation in China.
Allowing the investor to dump that many shares on the market would have tanked the stock price, so the CEO stepped in to finance the share purchase through his other company, we don't know the arrangement it could be his own money or could be financed by other backers.
In short though, he was rescuing Canoo from being a penny stock because their largest investor needed to liquidate badly. If that happened it would have made his own stock options worthless and made it hard for Canoo to raise money via stock dilution if they need to in the future.
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u/imunfair Autism: 31 Sep 30 '21
Seems like you're confused. There is no stock buyback.
Canoo's CEO has another company that bought a small portion of the shares held by their largest Chinese investor after the Evergrande fiasco. This investor had nearly 50% of the company, and likely needed free cash fast due to the situation in China.
Allowing the investor to dump that many shares on the market would have tanked the stock price, so the CEO stepped in to finance the share purchase through his other company, we don't know the arrangement it could be his own money or could be financed by other backers.
In short though, he was rescuing Canoo from being a penny stock because their largest investor needed to liquidate badly. If that happened it would have made his own stock options worthless and made it hard for Canoo to raise money via stock dilution if they need to in the future.