Basics

What is a share issue?

A share issue is when a company issues new shares and sells them to raise money — to grow, buy a competitor or pay down debt. The very first share issue is the listing (IPO), where the company goes public. If it happens later, while you are a shareholder, you afterwards own a slightly smaller part of the company, because there are now more shares. That is called dilution.

A worked example — dilution

A company has 1,000 shares and you own 10 of them: 1%. The company issues 250 new shares to raise money. Now there are 1,250 shares, and your 10 are 0.8%. Your share of the profit and the dividend has shrunk by a fifth — without you doing anything.

Whether that is bad depends on what the money is used for. Used wisely, the company can become so much bigger that 0.8% of the new company is worth more than 1% of the old one. Used to plug holes, it is simply a loss.

The three kinds

Listing (IPO): The company's first sale of shares to the public. Much talked about, often expensive — the price is set by the seller.
Rights issue: Existing shareholders get first right to buy new shares, typically at a discount, in proportion to how many they hold. You can buy in — or sell your rights to others. Do neither and you lose both the discount and your share.
Private placement: New shares are sold to selected large investors. Quick for the company; small shareholders are diluted without being asked.

The opposite: buybacks

When a company has too much money, it can do the reverse: buy back its own shares and cancel them. Then there are fewer shares, and your slice grows. Many large companies do this every year. Share issues and buybacks are the two dials the company has for changing how many pieces the cake is cut into.

Kiggo says: A share issue makes the cake bigger but cuts it into more pieces. The question is always: does your piece get bigger or smaller?

The typical beginner's mistake

Ignoring the letter about a rights issue because it looks complicated. Then your rights expire worthless, and you are diluted without getting the discount. Read it — or at least sell the rights before they expire.

How you see it in Kiggo

Kiggo shows the number of shares behind the market cap and notes at the key figures whether they are per share. Kiggo does not trade and does not take part in share issues — that happens through your bank, which contacts you when you have rights. Kiggo explains the words so you understand the letter.

Frequently asked questions

Is a share issue bad news?

Not necessarily. A company raising money to grow can become more valuable. A company raising money because it is running out is something else. Read what the money is for — it is in the announcement.

Should I take part in a rights issue?

That is your choice. Take part and you keep your share. If you do not, you should sell the rights so you get something for them. Kiggo does not recommend one or the other.

What is an IPO?

Initial Public Offering — the listing, where a company sells shares to the public for the first time. The price is set in advance, and in the first days it often swings a lot.

Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-23.

Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.