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Why would a corp issue new shares BELOW market price?
| odious church building mad-dog skullcap | 09/11/19 |
| Razzle roast beef | 09/11/19 |
| mildly autistic plaza mood | 09/11/19 |
| Insane Bateful Location | 09/11/19 |
| Disrespectful Useless Sanctuary | 09/11/19 |
| adventurous stag film haunted graveyard | 09/11/19 |
Poast new message in this thread
Date: September 11th, 2019 6:52 AM Author: odious church building mad-dog skullcap Own a stock that has been making some nice gains, bought at 30 and it went to 41 in addition to a 10% dividend yield (on my cost basis). Stock was priced at 41 and change, and the company announced that it was issuing a fuckton of new shares at 40 to raise cash. Why would these faggots do this? Share price instantly dropped to 40 and I'd imagine it's going to stay there. (http://www.autoadmit.com/thread.php?thread_id=4341436&forum_id=2#38817080) |
Date: September 11th, 2019 8:13 AM Author: Razzle roast beef That’s what the ttt underwriters were able to sell it for on the market (http://www.autoadmit.com/thread.php?thread_id=4341436&forum_id=2#38817183) |
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Date: September 11th, 2019 8:26 AM Author: mildly autistic plaza mood No one would buy in the offering if they could buy in the market for less. (http://www.autoadmit.com/thread.php?thread_id=4341436&forum_id=2#38817208) |
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Date: September 11th, 2019 8:27 AM Author: Insane Bateful Location LJL at trying to make money in the stock "market" unless you are an institutional buyer who can COMMAND a new issuance and discount. (http://www.autoadmit.com/thread.php?thread_id=4341436&forum_id=2#38817213) |
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Date: September 11th, 2019 8:42 AM Author: Disrespectful Useless Sanctuary cr you're literally buying diluted shares (if a company is worth $1000 and has 1000 outstanding shares worth $1, its stock would be worth $.50 if the company issued another 1000 shares) so the new stock has to be priced with that in.
plus that's what underwriters (who are on the line to buy up any shares/bonds that don't get sold) push for for their own incentives. |
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Date: September 11th, 2019 8:35 AM Author: adventurous stag film haunted graveyard So people will buy them (http://www.autoadmit.com/thread.php?thread_id=4341436&forum_id=2#38817231) |