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Capital increase
BörseErwachsene
A company issues new shares to raise fresh capital. Existing shareholders are “diluted” (their stake shrinks), but usually have subscription rights.
In a capital increase, the company issues new shares and sells them to raise money for investment, debt reduction or acquisitions.
What does this mean for you as a shareholder?
• There are now more shares in circulation
• Your percentage stake in the company falls ("dilution")
• But: you get a subscription right – the right to buy new shares on a preferential basis
Example: a company has 1 million shares, you own 100 (= 0.01%). 200,000 new shares are issued. Without a subscription right, you drop to 0.0083%. With the subscription right, you can buy 20 new shares and keep your 0.01%.
Did you know? In a capital increase, existing shareholders are diluted. That's why they receive subscription rights, which can be traded on the stock exchange.
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