Additional issuance is usually divided into two types:
1. Public offering: A listed company issues new shares to public investors to raise funds. This way can allow more investors to participate in the company's investment, which is helpful to improve the company's popularity and shareholder base.
2. Private placement: Listed companies only sell new shares to a few specific investors (such as institutional investors and large enterprises). This way can raise funds faster, but relatively few investors participate in the investment.
When issuing additional shares, companies need to abide by relevant laws and regulations, such as the Securities Law of China and the Securities Law of the United States. The company needs to submit an application for additional issuance to the regulatory authorities and disclose relevant information, such as the reason, price and quantity of additional issuance. After obtaining the approval of the regulatory authorities, the company may issue additional shares.
After the completion of this issuance, the newly issued shares will be included in the company's total share capital, and the shareholding ratio of the original shareholders will be diluted. In order to protect shareholders' rights and interests, many companies will set certain preemptive rights when issuing additional shares, allowing existing shareholders to subscribe for new shares in proportion.
It should be noted that the issuance of additional shares may lead to the decline of the company's share price, because the issuance of new shares will increase the supply of shares, thus putting pressure on the share price. However, if the additional funds are used reasonably, it will contribute to the long-term development of the company, and shareholders may eventually benefit from it.