As a holder: if I couldn't see progress in the SP for a long...

As a holder: if I couldn't see progress in the SP for a long time, didn't agree with the rights issue, and believed the price would come down further, then I would sell now and buy back in cheaper.

As a holder: if I believed that the funds generated for the company by participating in the rights issue were more beneficial to the long term SP irrespective of daily pips, then I would participate in the rights issue.

As a non-holder: if I had any interest in potentially investing in this company then I would see that there may be opportunities slightly below where the SP is now and would look to buy in, with the understanding that my purchase would not benefit the company, it would simply transfer funds to the person selling me the shares.

So reason 2 is why. All other situations one obviously wouldn't.