Bonus issue - Is it a bonus really? From below, assuming Company A announced a bonus 1 for 1, the paid up capital of the company changed from RM5 million to RM10 million. However, the Shareholders Funds does not change at all - remained at RM11 million. A bonus issue does not do anything to the fundamentals of the company.
|An example of account for bonus issue|
Rights issue happens when the company is in need of additional funds and they are asking the shareholders to contribute based on the holdings that they have at the point of time during the ex-date of the exercise. Very often the rights is being issued at a discount to the traded price - otherwise no one will exercise. No major shareholder will issue a right if they do not have the funds to pick up the rights. It will reduce their holdings unless it is an exercise to force them to do so as the float of the company does not meet the requirements of Bursa.
A right will cause dilution to share price if it is issued at discount - and if the person does not pick up, he / she will face dilution in the value of the stocks price.
Does not really seem to be so but a fund raising exercise as well. And it will dilute the value of the shares as well. Hence, as much as a warrant is welcome due to the sweetener nature of the stock as it is usually issued for free, over time it will dilute the share price. Usually, the warrant's exercise price is determined at ex-traded price of the company.
Issued at a discount as well most of the time. Hence, it is value depreciat-ive to the stocks. Sometimes, the private placements of shares are issued to parties known to the major shareholders or even nominees holders. Since it is issued at a discount, and if issued to related friendly parties, it may not turn out to be a good thing for minority shareholders.
Depends on the exercise and how much unused additional funds companies have. If the perceived value of the stock is low, this exercise will be positive for the company. However, be aware of major shareholders that used them for their own personal advantage. Do especially watch out companies that do buybacks but yet the major shareholders continue to sell their own stocks.
These are issued from the buybacks that the company did. Does not mean anything as if they are doing the buybacks might as well cancel off the shares as providing share dividends is not a reward to shareholders as sometimes mentioned.
To me, it is a misleading exercise.
Memorandum of Understanding - does not mean anything as it is just an agreement that says both parties understand that they will or may in fact not pursue in future - tie-ups, projects etc. A useless piece of announcement usually which is meant to mislead investors.