Why do stock prices often go up when a company issues a new offering?
Trinidad asks:
I’m just wondering how it is that stock prices can go up when a company offers new common shares (i.e., not in an IPO). It seems that, rationally, the stock price would fall because each share now represents a smaller percentage of the underlying assets of the company.
I’m just wondering how it is that stock prices can go up when a company offers new common shares (i.e., not in an IPO). It seems that, rationally, the stock price would fall because each share now represents a smaller percentage of the underlying assets of the company.
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