RE: New Investor29 Apr 2020 22:24
A rights issue will dilute shareholders but it all depends on the price they get. A higher SP is better as they can raise more money and dilute less . A low . The restaurant group raised equity 2 weeks ago , SP was 60p and they got a price of 58.5p .. The SP hovers between 50-60p now but shareholders were diluted 20% which isn’t to bad .
Sirius minerals raised equity when the SP was 30p , they got it at 20p and diluted shareholders 50%, it was a disaster.
Either way I wouldn’t want to be in a share that dilutes it’s shareholders as the road to recovery is king and sometimes never reached