What do you mean by rights issue? Is it still used to pay money?

Rights issue is the behavior of listed companies to further issue new shares to existing shareholders and raise funds according to the development needs of the company and in accordance with relevant laws and procedures. Investors should have a clear understanding of the prospectus issued by listed companies before implementing the allotment payment.

In issuing shares to the original shareholders, a listed company shall meet the following requirements in addition to the general provisions on public offering of shares:

(1) The number of shares to be placed shall not exceed 30% of the total share capital before this placement;

(2) The number of shares that the controlling shareholder should publicly commit to subscribe for before the shareholders' meeting;

(3) Distribution on a commission basis as stipulated in the Securities Law.

trait

A major feature of rights issue is that the price of new shares is determined by discounting the stock market price when issuing an announcement. The discount price is to encourage shareholders to bid for the subscription.

When the market environment is unstable, it is very difficult to determine the matching price. Under normal circumstances, the price of new shares is discounted by 10% to 25% according to the stock market price at the time of issuing the rights issue announcement. Theoretically, ex-dividend price is the weighted average price of stocks and new shares before the issuance announcement, which should be the share price after the placement of new shares.