4 ms·
The shares are basically the a piece of the company. By issuing new shares it automatically depreciates the value of each share, so the company is worth the sam
by lanevorockz 10y ago
The shares are basically the a piece of the company. By issuing new shares it automatically depreciates the value of each share, so the company is worth the same but you own a smaller share of the company. You can end up in a grey area between two situations.
1. Everyone takes cash and you get the expected share price
2. Everyone takes shares and the value expected is halved
- ghshephard 10y agoIssuing dividends also depreciates the value of each share as well. (By exactly the total amount of the dividend / total number of shares.)
- lanevorockz 10y agoI missed that, financials are the same so they should amount for essentially the same value. Still the dynamics of both are different and usually depreciation of the dividends is factored out on the price of the stock. I wonder if they are pricing the stock just before dividend and if that's fair.