What happens when a company issues new shares?

Hello :freetrade: community

A newb question on share issues if anyone can help please.

I chose Alien Metals £UFO for the Bull and Bear Double Bagger Challenge and while checking out a recent rise in it’s price, saw that they were planning a share issue to raise funds to purchase 100% of one of the mining areas they share with other companies.

The price has gone up around 30% today (Come Ooon!) :rocket: :rocket: :rocket: but imagine it may decline during the share issue?

I understand that current shareholders will be offered discounted shares during this process and wondered if this was true for us mere mortals here on :freetrade: ?

Can anyone tell me more about share issues and what we might expect please?


Share issues, of the type you seem to be suggesting, are normally associated with stock dilution. So you should expect a depression of share price not an increase.

If the share price has increased almost certainly it is because this firm has announced ‘good’ news and as this is a mining stock it suggests to me that someone might think that they have hit gold or something. It could also be speculation about a discovery. These kinds of stocks are also notorious for attempts at stock price manipulation.

Thanks @bitflip I thought it was strange.

I spotted another announcement on here that they found almost 2% silver in some core samples… maybe an anomalous sample? :cowboy_hat_face:

I have read that small new mining companies are often avoided by investment funds and have taken that into consideration - and unless I spot something really special, won’t invest in any more.