BOI Shares - Practical Questions

M

mloc

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I have a few practical questions with regard to purchasing Bank of Ireland shares.

If I purchase shares today at say .33c each, can the bank issue more shares in the future and mathematically dilute the value of my shares or does a future share issue have no direct mathematical effect on the value of my shares?

As the bank repays the state, would this have a direct effect on a shareholding I took out now?

I appreciate in both scenarios above the market may react and that will effect everybodies shares up or down but what I'm trying to establish in my questions above is whether there is an automatically mathematical recalculation of my share price in either of the scenarios listed above.
 
If the bank issues more shares, yes it would dilute your holding, however you would have the opportunity to buy a pro-rata number of those new shares. It is called a pre-emption right which attaches to existing shares.

Frankly if you know this little about it you probably should not be considering buying shares directly.
 
I don't think you have to worry about share dilution, that happened after the crisis when first the government and then private investors 're capitalized the banks thereby diluting the existing share holders. I would safely say that it would be many years before the bank would get themselves in that situation again. If anything there will probably be a share consolidation which won't have any immediate effect just make the share look a bit more respectable again.
 
Issuing new shares is something that companies often do in the normal case of business. Its not just in the extreme case of the crises of recent years.
 
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