John,
Share price might drop - market is not always rational.
Actually share price should increase -- as rights issue is a positive financial gain for shareholders.
Shareholders gain additional shares at less than market price.
There is a dilution factor after rights issue has been taken up.
But those who take up the rights are still in front.
Otherwise companies would not make such issues.
Tis much better for shareholders than the allocation of additional shares to institutions.
Better that shareholders profit - don't you think?
Cheers,
NT
Add to My Watchlist
What is My Watchlist?
