Why does a placement cause the share price to decline?
A share placement refers to the process in which a company raises capital by selling shares (usually a large block of them) directly to institutional investors or a select group of investors. A placement typically causes a company’s share price to decline for a few reasons: Dilution of Shares: When a company issues new shares through a placement, it increases the total number of shares in circulation. This dilutes the ownership stake of existing shareholders. Investors often perceive this as …
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