"This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired."
Yes, they should be fired, but that's not how business works. In reality executives are self-dealing all of the time and corporations survive due to the constant small wins and losses between large groups of self-dealing people.
The CEO, as an insider, has the best knowledge of a company's financial position and estimates of the coming year. Additionally, executives can manipulate earnings and costs by a degree to achieve the outcome they want.
Issuing stock signals to investors that insiders expect the price to go down just as buybacks signal that it will go up. Issuing stock will send the stock lower whether or not the actual numbers show losses in the future.
Yes, they should be fired, but that's not how business works. In reality executives are self-dealing all of the time and corporations survive due to the constant small wins and losses between large groups of self-dealing people.
The CEO, as an insider, has the best knowledge of a company's financial position and estimates of the coming year. Additionally, executives can manipulate earnings and costs by a degree to achieve the outcome they want.
Issuing stock signals to investors that insiders expect the price to go down just as buybacks signal that it will go up. Issuing stock will send the stock lower whether or not the actual numbers show losses in the future.