Eating stock happens when a company or investor needs to sell stocks that just don’t want to be sold. That is, when the stocks aren’t attracting buyers...at a decent price...on the market.
For instance, a company might have their IPO, and it doesn’t go so well. If a company doesn’t get enough investors on board to purchase their shares during an IPO, the company’s own underwriter has to buy the rest of the shares it needs to become legally public, “eating stock” (yeah, embarrassing and expensive).
Likewise, an individual investor might be looking to sell their stock since it’s not doing to well, but nobody else wants to take it off of their hands. Bummer, man (also embarrassing and expensive).
TL;DR: eating stock is an embarrassing thing, but hey...every active investor has been there. Just gotta eat your pride (and some stock) and move on.