Definition
A share issue is when a company issues and sells new shares to investors to raise capital. It increases the number of shares in the company — and therefore reduces existing shareholders percentage ownership. This is called dilution.
Positive share issue
The company raises capital to finance growth, acquisitions or new projects. The money creates more value than the dilution.
Negative share issue
The company needs money to survive. A desperate move that signals serious problems.
Always ask: Why does the company need the money? The answer determines whether the issue is a positive or negative sign.
"New opportunities require new capital. But not all capital creates opportunities — some just saves sinking ships."— Florence Scovel Shinn