right issue

Maybe at par – where the mid market price is only slightly above par.

Maybe at a premium where, say, a $1 nominal value share has a mid market price immediately before the issue of, say, $2.30 (the issue price would then fall between $1 and $2.29)

But NEVER at a discount on the nominal value – so NEVER below $1 (if $1 is the nominal / par value of the share)

It’s of value because they have the opportunity to maintain their percentage holding in the share capital of the company, the market value of the shares will fall, theoretically, to a lower value than before the issue and that opens up a greater market (because people like me would rather have 100 shares worth $2 each for my investment of $200 than just 1 share with a market value of $200)

The idea behind the rights is to raise finance for the directors of the company to be able to pursue a potentially profitable project and that should benefit the shareholders in the future – if the project is successful, the share price should increase

But, of course, if you don’t want to take up the rights or you can’t afford to, then you can sell those rights to anyone else on the open market (through the stock-exchange)

OK?