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The Two great lies used to justify share placings

Tom Winnifrith
Thursday 4 April 2013

Why do companies issue shares? Because they need cash. Why do they say they are issuing shares? Er….well it is never because they are running out of cash, of course! There are two standard excuses which you see in RNS after RNS and they just do not wash.

The first is that the company is issuing shares “in response to institutional demand.”  The most laughable RNS in this vein in recent weeks in this vein came from K3 Business Technology (KBT). Its shares had halved in value and it was issuing shares “in response to institutional demand.” Pull the other one…

on SpreadbetMagazine | Comments
About Tom Winnifrith
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Tom Winnifrith is the editor of TomWinnifrith.com. When he is not harvesting olives in Greece, he is (planning to) raise goats in Wales.
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