The difference between the public offering and third-party allocation of new shares

Mainly in the capital increase of the company as a "public offering" There are two types of "third-party allocation of new shares".
Public and the capital increase, by way of a wide range funding through the stock market, general investors also it is possible to buy the newly issued shares. The third-party allocation of new shares, on the other hand, existing shareholders other than the specific third party only from the fact of how to financing, general investors will not be able to buy the shares to be issued to the new.

When listed companies to capital increase, you will be required to provide public notice in advance in both cases. Because, since the number of shares outstanding is increased if the capital increase, in order to lead to the dilution of shareholders' interests, it is because is for existing shareholders to mean that the (as it is) loss. This "one share dilution of earnings" will to be caused not the same as would be public offering that it would a third-party allocation of new shares.

However, the capital investment and business expansion by funding, if increased profits itself of companies, you can also benefit of shareholders increases to more than minute that was dilutive. If you become so, it is an ideal capital increase for investors, it can be said that the thing that should be welcome.

In the case of the REIT (real estate investment trusts), all benefit from such problem of tax will be turning to dividends, retained earnings is not basically. Therefore, in order to REIT company to acquire new properties for earnings growth, either the debt from financial institutions, or it is not only one of either the capital increase. However, in the case of REIT, capital increase funds are used to acquire new properties, because we will increase certainty in sales as more property is, and I would say it's positive capital increase basically. But in the capital increase, there are often also be quite retrospective case or, simply done in order to have trouble financing.

For example, since the financial crisis of 2008, UFJ · Mizuho Sumitomo of 3 and large mega Mitsui, such as Nomura Securities, Daiwa Securities, major financial institutions was unanimously capital increase. But these are not never future profits vision, such as lead to, simply Dattari compensation of that when the financial foundation of the company had weakened its, "Dosakusa covered the capital increase from the speculation of the future of capital adequacy requirements is strengthened it was not only ". Therefore, existing shareholders who will dislike this capital increase proposal, stock prices after the above-mentioned financial institutions all capital increase announcement has caused a big crash.

It would be public offering when would be a third-party allocation of new shares, because the value of existing shareholders at the moment will be dilutive, is in many cases the stock price falls in recent years. But then, if the company can grow even larger by funding and many investors judgment, sometimes stock prices to rise even after the capital increase announcement. In addition, even in the case of retrospective of capital increase does not lead to revenue growth, if that it is being woven into stock prices have been predicted in advance that (certain period of time much stock prices are going down) is not lowered stock price after the capital increase announcement , also located in the rare case that rebound to reverse in the material Detsukushi.