On Friday morning before the opening bell, American Apparel (AMEX: APP) announced that CFO Ken Cieply -- the main founder and CEO Dov Charney called a "complete loser" -- had resigned. Except they didn't exactly announce that. The headline was American Apparel Announces Hiring of Interim CEO, which is reminiscent of the old joke about NASA needing another seven astronauts. But the market saw through the attempted spin and sent the stock down a few cents.

But American Apparel's spin machine wasn't done. At 2:00 PM ET that same day, the company decided to announce a "$25 Million Share Repurchase Program," which allowed the stock to close up for the day. That press release raised a number of red flags. The reason for its timing was obvious: give investors some good news to go along with the resignation of the CFO. I'm always of skeptical of companies that use buybacks to try to pump up share prices. It's even worse when the company times its announcement of a buyback to pump up its stock price.

Then there's the question of whether Charney and company are really in a position to be buying back stock. American Apparel has a substantial debt load and ambitious expansion plans. I doubt that it's generating enough cash to make a buyback prudent.

Of course American Apparel hasn't committed to buying back stock. It's board of directors has simply said that it can. I'll be surprised if it does but, either way, the company made some PR hay.