Why do investment banks buy put options from companies?

Companies have collected billions in premiums from privately sold put options written on their own stock. It is puzzling that counterparties, investment banks, would agree to make such transactions with better-informed companies which extraordinary ability time the market as documented by Jenter et al. (2011). To resolve this puzzle, we develop a model shows offering buy parties, receive private information about issuing companies. Our also incorporates practice of firms (such Microsoft) sometimes repurchasing and thus providing additional banks. Empirically, find support for our theory an abnormal 9% increase stock prices 40% trading volumes around sales. Examination 13D filings reveals upper management insiders cannot completely account change volume.