What Will Happen To My Shares When The Company Issues New Common Shares?
A web user asks, I have shares in Ford, and I’ve heard that they are going to issue new common shares 20% in excess of the outstanding amount. When this happens, how is actually going to affect my shares?
I know people are talking about dilution, but I don’t really get what they mean by that. Does that mean the shares are going to reverse-split or only the price is going to go down somewhat?
Can you help them out? Post your advice!
Related Items:
- What’s it mean when a company says it’s going to reduce the number of authorized shares of its common stock?
- What Happens To The Price Of A Share When A Company Reduces The Number Of Outstanding Common Shares?
- What happens if an odd reverse split is issued if you have a round number of shares?
- what would happen to a company’s shares if the company went bankrupt or wound up?
- What ever happen to the shares of apple that Microsoft brought from in 1997?
Posted in Trading
http://whit.me/StocksRobot
Before you start investing, check that site out.
We all heard of “Forex RoBot” which automatically executes decision intelligently to make gains… that site features a Stock Market RoBot! It intelligently executes actions to make gains and it’s a Fortune generator.
To make lots of money you got to spend some money. That is the official website that helped me start making thousands recently. It was featured in Forbes magazine before – it is damn good. Even Mutual Fund Managers use it! Many people praised the Robot and wrote testimonials.
Especially with the current economic crisis, imagine how much you can make once it hits the bull market!
Dilution means that the current shares will be “watered down” so in the case of stocks. The stock will go down depending on the price that the offering is at, for example, Fords close today was 5.69, if the offering is prices at say $5.7 then your shares would be fine, or if it was priced about 5.69 you would be looking good. But say they priced the shares at $3, then there is a strong possibility that the stock price would go down towards the $3 mark. An example of this was in October General Electric had a secondary offering with a price of $22.25, and the previous day the stock had closed at $24.5. At the end of the day with the offering GE closed at $22.15. So the whole point is where the price of the offering is!!