ATFXAnalysis: the difference between allotment and distribution of shares, and the prevention of fraud in investment

Allotment and stock offering are commonly used terms in the stock market and are also essential knowledge for investors to invest in stocks. Today, the editor will analyze the difference between stock allotment and stock dividend for everyone?Let's take a look together.

The difference between allotment and dividend?

【1】Different definitions

Allotment is the act of a listed company issuing new shares to its original shareholders to raise funds based on its own needs. And share giving is the act of converting surplus reserves or undistributed profits into shares and distributing them to shareholders. Among them, the rights issue belongs to refinancing, while the rights issue belongs to dividend type.

【2】Different stock sources

The stocks for allotment are sourced from newly issued stocks by listed companies, while stock dividends convert undistributed profits into shares.

【3】Different operating procedures

For investors, they are free to choose whether to participate in the rights issue. If they participate in the rights issue, they still need to pay a fee. If the payment is not successful, it will be considered as a failure of the rights issue. And the stock offering does not require investors to manage it, nor does it require payment, allowing the shares transferred to the account.

【4】Different ex right prices

Both allotment and dividend require ex-right, but the ex-right price calculation is different.

The above are some differences between stock allotment and stock offering, hoping to be helpful to everyone.