Why, Netflix, Why?

How much money do you need when your largest competitor is against the creditors' ropes? Or when a digitally delivered future may mean thinner moats but without the same kind of capital intensive structure?

There's never enough money, apparently, if you happen to be Netflix (Nasdaq: NFLX). In a baffling move, the company is looking to initiate a secondary offering next month that will dilute investors by an additional 3.5 million shares while raising about $100 million.

Netflix doesn't need the money. It closed out a solid first quarter with a debt-free balance sheet blessed with $227.8 million in cash. And its only real rival, Blockbuster (NYSE: BBI), is struggling to integrate its online and offline rental business into a cohesive yet profitable model.

The buyout rumors will get marked down, too. We heard speculation in November that Amazon.com (Nasdaq: AMZN) was looking to gobble up Netflix for $42 a pop, but now, if that bears fruit, the purchase price would trickle down a tiny bit, since no one would pay a premium for freshly minted shares.

With 55.2 million basic -- and 66.5 million fully diluted -- shares outstanding, another 3.5 million shares may not seem like much. It's just that the action speaks louder than the actual dilution. Some companies, like Google (Nasdaq: GOOG), have been able to get away with doing this. But as much as I love it -- I even own a piece of the company -- Netflix is no Google.

Netflix shares have nearly tripled over the past year, and this move just seems like a greedy admission that, at this price point, Netflix would rather be a seller than a buyer of its own shares.

At the other end of the spectrum, share buybacks often indicate that a company believes its stock is undervalued. Unless the repurchases are being done to offset the superfluous issuance of executive stock options, the market rightfully sees it as a good sign. Printing more shares, unless the extra greenbacks would be critical to the company's existence, is just avarice.

Pointless, stupid avarice.

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Longtime Fool contributor Rick Munarriz has been a Netflix shareholder and subscriber since 2002. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.