RE:Rites offeringFor the amount of shared I could buy I might as well just buy at market. But for lareg investors they can now get a significant number of shares without driving the proce up. So it lets large rich investors dilute smaller retail investors.
for example say I have 300,000 shares. According to the rights offering I will get 300,000 rights which would allow me to buy 100,000 common shares at a value of 0.20 each. I could do that on the open market over a few days. But if you had 30,000,000 shares you would now be able to use your new rights to purchase 10,000,000 common shares at 0.20 cents. So a large investor who belives this company will move up could do that without pushing the price up on the open market.
well at least they are offering the buying opportunity to existing shareholders and the money raised from the shares goes to the company not just a change of hands between people on the open market. So while there is share dilution the company value does go up to compensate due to the cash inflow. But I expect that with existing shareholders being able to get more shares via this rights offering the common shares on the open market will not move up much at all until this is all done, likely going to hover around .18-.19. So if all you want is a few extra shares I would consider buying through the open market.