Tldr; Is it possible for a company to create new shares that are not in it's treasury?
I own stock in the company I work for. It's a micro company and it trades OTC.
Recently shareholders (myself included) voted to allow employees to buy and own company shares at a small discount during certain periods (after earnings reports etc). The document reads like the company will create new shares out of nowhere to sell to the employees. I didn't know a company could create new shares. Wouldn't the company have to have equity to sell as new shares?
I'm using my company as an example but I'm more interested in the broader market. As an investor do I need to worry about a company creating new shares and diluting the stock? I'm not worried about a company selling existing shares from it's treasury and diluting the free float. I look at the value of the entire company, not just the float. But if a company can create new shares that are not in the Treasury that's like the fed printing new dollars. It decreases the actual value of each share and would be more like stealing.
Tldr; Is it possible for a company to create new shares that are not in it's treasury?
Submitted July 23, 2021 at 07:09AM by BeaverWink https://ift.tt/3wU35oQ
