Investors should not go into the misunderstanding of pursuing high discount when deciding whether to participate in the rights issue. Because it has already been analyzed above, no matter how low the allotment price is, there will be no arbitrage opportunity after ex-rights.
On the contrary, buying a low-priced rights issue will only lead to the depreciation of the original shares, so the discount rate of the rights issue price is too high, which generally indicates that the demand for funds by listed companies is high and urgent. In this case, investors should be more cautious.
Extended data:
Rights issue can be said to be a way of financing. Listed companies issue new shares to existing shareholders at a price lower than the market price in order to achieve the purpose of increasing efficiency and expanding shares. Moreover, the application for allotment is generally put forward by the board of directors, and then submitted for review after being approved by the shareholders' meeting.
Proceed from the company's fundamentals, combine the rationality of the rights issue plan and the liquidity of its own funds, and carefully formulate investment strategies. If you decide not to participate in the rights issue, you must sell your shares before the registration date to avoid unnecessary losses. If you are optimistic about this stock for a long time, you can buy it after the rights issue is completed.