ATFXAnalysis: Is it good to issue non-public stocks and prevent investment fraud

After the company goes public, it can issue stocks to raise funds, expand its business, and strengthen its strength. Investors can earn price differences through buying and selling stocks. The company's stock issuance is divided into public and non-public offerings, and it is always a public offering when going public.

Is non-public issuance of stocks a good thing or a bad thing?

The probability of a positive outcome is greater. Because non-public issuance of stocks by a company refers to the act of a limited liability company issuing stocks to specific targets in a non-public manner. Although it is not available to ordinary investors, it can help the company raise more funds and is often seen as good news, which can stimulate the current stock price of the company and be inspiring.

Benefits of non-public offering of stocks:

【1】Non public offerings are generally made when specific investors have already found a direction to invest and are willing to actively allocate funds for investment. The investment quality is relatively good;

【2】It is possible to bring immediate performance growth to the company through injection of high-quality assets, integration of upstream and downstream channels, etc;

【3】It is possible to introduce strategic investors and lay a solid foundation for the long-term development of the company.

【4】Non public issuance of stocks often comes with restrictions, making it impossible for stocks issued at low prices to be listed for arbitrage in the short term. As the issuance price is not lower than 90% of the average price of the top 20 trading companies' stocks on the pricing benchmark, targeted issuance can increase the net assets per share of listed companies.

Disadvantages of non-public issuance of stocks:

【1】The limited selling period for non-public issuance of stocks, once the restricted selling period is lifted, the pressure on stock prices will also be significant.

【2】If the price of non-public issued stocks is much lower than the market price, then this stock will enter later2After the secondary market, there will be a strong profit impulse, which will actually suppress the company's stock price.

【3】If the raised funds are used to replenish capital, repay bank loans, or acquire companies that are generally not favored by market participants, it is a bearish scenario for stocks.

The rise or fall of stock prices mainly depends on the profitability and development prospects of the listed company. If the company is strong and has good development prospects, investors are willing to buy the company's stocks, and the price will rise with water.