Allotment is an act of a listed company to further issue new shares and raise funds to the original shareholders in accordance with the relevant laws and regulations and corresponding procedures according to the company's development needs. Specifically, it is to place a certain number of new issuances to shareholders at a specific ** below the market price according to the proportion of shareholders' shareholdings. The original shareholders may or may not exercise the right to subscribe.
Whether a rights issue is a good thing or a bad thing depends mainly on the specific situation.
1.If the allotment is in a trend, then the allotment may be a good thing. Because the allotment is usually lower than the market, shareholders can buy new ones at a lower price, with the opportunity to make a profit when they are at the right time. At the same time, the allotment will also increase the number of shares circulating in the market, which will help to improve the liquidity of the market.
2.If the allotment is in a trend, then the allotment may not be a good thing. Because although the allotment is lower than the market, it may pull down the price further. At the same time, if shareholders do not subscribe for the allotment, it may dilute their shareholding ratio and affect their interests in the company.
In general, a rights issue is a financing act, and its success depends on a variety of factors, including the company's performance, market environment, rights issue**, etc. Investors should fully consider these factors and make rational investment decisions when deciding whether to participate in the allotment.