Businesses having a right issue

[sleep envy]

Quick question for those in the know - what do you understand by the above?

thanks

[10 Pence Short]

Too many Tories on the board.

[Marf]

Do you mean rights issue?

[Digga]

Present shareholders of the business are given first refusal or first rights on an issue of additional shares. Currently being done to plug planet sized holes in the company's balance sheets, but at other times is done for other purposes.

[sleep envy]

Marf said:

Do you mean rights issue?

yep

cheers digga

[sleep envy]

thegavster said:

That's a geezer suggesting that they're having some problems.

interesting...

[jeff m]

A company in which you probably own shares is after some cash.
They probably have a very good reason as this would not normally be considered a great time for a rights issue.

If you do not take up the issue then your share in that company will reduce. No big deal, if you own 0.004 of the company at present after the rights issue you will perhaps own 0.0039.

On the other hand you obiously bought that share for a good reason !!!! So maybe its worth picking up.