If a company with huge cash reserves like Google was selling new stock then yes, I would assume they thought they believed their shares were overvalued. But in

If a company with huge cash reserves like Google was selling new stock then yes, I would assume they thought they believed their shares were overvalued. But in general it's the same as taking VC investment. It might just mean the company believes they can use the cash in a productive way, or that they need cash to continue operating.