A recent example of what happens to a stock price after a secondary offering is to check out Aeroflex (ARX). On mArch 19 they just did a secondary offering of another 2,500,000 shares. It immediately pushed the price up from 13 1/2 to 14 5/8. It has now retreated back to 13 1/2.
Hope this helps. Go BKE!
When a company issues more shares, the money goes into the company( ie if it issues a $1,000,000 worth of securites and sells them all, it has $1,000,000 cash). Your ownership may be be diluted but your value is not so price rarely changes much. What changes the price is what the company does with the money.
Case in point is Compaq. They issued new stock (price did not change), bought Digital with combination of cash and shares. Their stock is down now but that has to do with earnings and inventory.
That's the way I understand it.
well... i think it depends on the stock.. issuing new shares may get new money into the stock hence greater outside demand..
but existing shareholders may feel they are getting the screw and decide to dump it more supply.. so i guess it boils down to
what you feel the long term prospect are of the company, if all existing shareholder are confident in the companies prospects and
people are lining up to buy the new shares well that would be positive to the stock price... Of course this is all just
the company shares are in demand? Do you know of any company in the past year that has issued more shares so I can see the results. Thanks for your prior response. Looks like BKE closed up for the day. Yeahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh!
The general rule of thumb <as always there are instances where the rule is violated> but if a company issues more shares they are dilluting the current shareholders value, thus the share price tends to fall.. Simplicitic example... 1000 total shares outstanding you own 500.. thus you own 50% of the company company decides to issue 1000 additional shares to the public therefore your total ownership of the company falls to 25%..
I thought it had to be 100's or 1000's. So to answer a previous question regarding bid size going through, I did not see anything larger than 1,000.
I am excited about store sales report coming out. I think it will impact the price. They should have good sales due to teens buying for spring, especially for spring break which usually is mid-March and April. Next week I'll wish I bought more at these lower prices.
This is a general question about investing. I hope someone can answer. What happens to company's stock price when they have a public offering of additional shares to raise capital? Has anyone been invested in a company that has had additional offerings and what happen to their stock price? Thanks in advance.
www.discoverbrokerage.com--they have real time quotes but I also use Thomsonrtq.com for free real time--My trades are 14.95
a trade but it is alot cheaper than my regular broker--really think long-term those guys are in trouble--Look at the bid
size--ask size for trading blocks--in thomsonrtq they represent in 100's at discover they are the real size--can be helpful when you
are ready to trade--bid as you know is the sell size--ask is the buy size--this stock appears to have some resistance levels
around the 52 area right now--a good monthly sales report would be a great help--still have great confidence here at these
levels-could just be consolidating--like to see more volume though------To Mike--how about buying a 50% share in BKE and a 50% share in
GPS--Take care all
Two great stocks to own--GPS is a little cheaper right now-but I feel BKE has had a bit more of a run-up because of the
split annoucement--charts look very similar-excellent-both are rated very strongly by Vectorvest-with BKE having a stronger
rating--GPS last split in April of '96-could be that this stock is due for another--like BKE better because it isa a quiet company but
all things considered if I were you II probably would buy GPS now in hopes of a split announcement--I'm very pleased to be a BKE
shareholder-up 28% in less than a month-I might consider adding GPS to my portfolio---GOOD LUCK---always best to do your own DD when
considering buying stocks