Yesterday, a netizen asked:Received an announcement that ** is about to be allocated, 3 shares for every 10 shares, is this a good thing or a bad thing, what should be done?
As a blogger who is afraid of being responsible and scolded, I didn't tell him the answer directly, but told him some content about the allotment, and it was up to him how to choose.
The following is some content about the allotment, if you don't know enough about this content, you can also take a look at it and make a reference.
In the world of investing, a rights issue is a common topic.
Allotment refers to a way for a listed company to issue new shares to its original shareholders. To put it simply, it is only in the case of holding ** that you are eligible to buy these **, and they are purchased according to a certain proportion.
For example, the announcement shows "10 to 3", that is, for every 10 shares held, you can buy 3 new shares. For example, I used to buy a **1000 shares, and now it has a "10 to 3" announcement, that is, I can buy another 300 shares of his new **.
However, the quality of the rights issue will be different for different companies and investors.
We can understand that the allotment is to allow us to increase our investment, and the following situations can be seen as good things.
Fundamentals. If the company's fundamentals are strong and its performance is growing steadily, from a long-term perspective, this is likely to be an upward trend.
Company Policies. Some high-quality listed companies will pay dividends to shareholders on a regular or irregular basis, if the company has a relatively stable dividend policy, the allotment can increase our shareholding ratio, and we can reap more dividends.
The stock price is at a low level. If the stock price is low in the early stage, the rights issue can increase the number of shareholders, enhance the company's visibility and improve the liquidity, which may drive the stock price.
Long-term investment strategy. If we are long-term investors, there is a high probability that a rights issue is also a good thing. Because we can increase the number of shares they hold by buying new shares and enjoy the company's future growth and earnings.
The previous paragraph has already introduced the situation where the allotment is a good thing, so the opposite is a bad thing.
The company's fundamentals are relatively poor, which makes people not interested in this **, and at this time, it is undoubtedly bad to dilute the proportion of shares and lose the interests of shareholders.
The stock price is at a high level, and the allotment is likely to lead to the stock price at this time, and the stock price is **, which is naturally a bad thing for us.
Short-term investors. For short-term investors, allotments are generally a bad thing, because short-term investors are interested in short-term gains, and allotments are likely to have a certain share price in the short term, which will lead to losses.
To sum up, whether a 10-for-3 allotment is good or bad needs to be judged on a case-by-case basis. Investors need to make decisions based on the company's fundamentals, stock price movements, and their own investment strategy.
The above content represents personal views only and is not intended to be advice or opinion.
Investment is risky, and you need to be cautious when entering the market.