Are activities that dilute shares required to be reported for public knowledge?

Asked 4 years ago

For example, when a company issues extra stocks. I often get surprised by stocks that go through this process which crushes the stock that day and I want to know if this information is released publicly before they actually do this. Or are the stockholders at the mercy of these companies and have to take the thrashing?

Andia Rispah Igobwa

Friday, June 11, 2021

No. You don’t need advance notice. Most companies have shelf offerings on file with SEC, which allows them to issue new shares at any time.
The response is always as immediate as soon as they announce it. So it’s not really a heads-up situation here rather an immediate reaction as a race to get out.
It’s a common practice but not something to panic over, and the price drop is usually temporary.
The markets are super-efficient when it comes to something like this, but you’ll hate it when you lose 10% to 15% overnight, which may take to weeks to recover.