Investors should generally dislike companies that issue stock because it’s better if they are self-financing and don’t need to dilute their shareholder base.
However, companies do need to grow, and financing is one of the prime reasons the stock market exists in the first place. Rather than dismiss all financings, here are five points to consider in determining whether one is good or bad.
1. A new share issue should be priced higher than the prior one
This seems so basic, but stocks are supposed to go up. When a company issues stock at a lower price than its previous issues, it just makes us … mad. Read More…