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Hello can anyone shed light on rights issue as to me they seem a bit of a scam so I’m guessing I do not understand something.
I own shares in different companies and now and again I get offered to buy extra shares in a right issues but so far I never have. However as I decline then my current shares are getting watered down in value so therefore I am losing money?
But if everyone accepts the rights issue then everyones shares will still be worth on average the same so no advantage there but at least you are not losing.
So to me a rights issue means either I don’t buy and lose out or I buy and do not gain anything so not ideal!
Yes I am getting offered say five pound shares at say four pounds but if EVERYONE takes up the offer then we are in the same position. But if I don’t take up the offer my five pound shares are now say worth four pounds eighty pence. What am I missing?
Looking at F9 videos seems I am losing money ignoring these letters! However if I buy the rights issue or I can sell the letter say above for eighty pence to someone else again I’m just breaking even so I have to go to the hassle of selling a letter I didn’t even want in the first place so I can then just break even. What am I missing?
Please don’t ask this sort of question in the general forum.
Ask in one of the specific Paper F9 Forums.
Rights issues are not a scam in the slightest.
If you have been sent a rights letter then you should not have lost money ignoring it because the company will normally automatically sell the rights for you if you do not reply (and will send you the cash).I have answered the rest of your question under the comments on the lecture where you also posted it!
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