stok market

2 posts / 0 new
Last post
ENSO LOUIS JEAN
ENSO LOUIS JEAN's picture
stok market

Hi,

i wanted to know about issuing of shares. For say if a company issued 100 shares and after a year the company issues another 100 shares is that mean that the value of the first 100 is less?

Jason Pride
Jason Pride's picture

Hi Enso,

The issue of new shares usually will not have an impact on the value of existing shares. This is because the new shares bring a cash inflow that matches the change in outstanding share value and everything balances out.

Where the value of existing shares changes is when there is a stock split and new shares are essentially given away to existing shareholders. In this case the value of outstanding shares is reduced in proportion to the stock split ratio.