Are capital increases beneficial for investors?

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If there is a business movement through which some of the companies listed in income move variable eso no es otro que ampliaciones de capital. Es habitual que de vez en cuando surja una novedad al respecto, donde las compañías recurren a esta strategy como fórmula para financiarse en los mercados financieros. Solo hay que repasar cuántas compañías se han decantado por este sistema en los últimos años. No solo los de pequeña capitalización, sino además otros del índice selectivo de la Bolsa española.

Despite everything, the controversy arises when small and medium investors evaluate whether these corporate movements are beneficial to their personal interests. And what is more important, if truly it is advisable to go to capital increases announced by companies listed in variable income. There may be opinions for all tastes, but the truth is that they are not well received in the financial markets. As has been shown in recent years.

In recent years, several listed companies have gone through this unique business procedure. In some cases, as an investor, you have been able to benefit. But in most with feasible depreciation in your investment positions. To the point that capital increases those who benefit the most are the companies in charge of carrying them out. And not in all cases. While minority shareholders, as in their own case, do not get out of these situations very well. As you will have the possibility to verify from now on.

What is a capital increase?

En primer lugar, será necesario que conozcas en qué consiste este movimiento empresarial en toda su intensidad. Debido a que en efecto, se trata de una operación financiera de cierta importancia que tiene como target aumentar los recursos propios de una sociedad para poder finance new investments. Utilizan diferentes estrategias para hacerlos navegar en canoa. Ya be a través de la emisión de nuevas acciones o a través de un aumento en el valor nominal de las acciones existentes. En algunos casos resulta más interesante suscribirse que en otros escenarios.

Either way, there is one very important thing you need to know. It is none other than the fact that they must be formalized when their shareholder positions are strengthened. Or what is the same, when through this procedure it is achieved that the invested capital increases, at least significantly. In spite of everything, this does not always happen, and it may even happen that you lose money through this movement of capital. Fundamentally if your investments are aimed at the shortest terms.

Another very different case is if the terms of permanence are focused on longer periods: medium and long. In these situations, operations are generally much more profitable. Fundamentally if they are not developed with some small trap on the part of the companies in charge of advertising them. In all these situations, the most advisable thing for the interests of small and medium investors is not to go to capital increases. It would even possibly be sensible that trade positions of the values found in this situation.

Expansions: latest moves

A few days have passed since one of the last capital increases was announced. Because indeed, the construction company Quabit A few days ago it promoted a capital increase of 38 million euros. In order to finance part of its business plan for the next five years and until 2021. On this occasion, it has the backing of the current reference shareholders. Although it remains to be seen how this measure will affect the positions of the investors of this company.

Either way, there are many small-cap companies who have undergone this very special procedure in recent years. With very unfavorable effects for your interests. Not surprisingly, they have caused their prices to depreciate. In some of the cases below very high percentages. Where savers have left many euros along the way. The only solution you have to avoid these harmful scenarios is basically not to scale in any way.

First-level securities, in other words, that are listed on the selective index of the Spanish Stock Exchange, the Ibex 35, have also gone through this situation. Some of the most prominent examples are Banco Santander, FCC or Sacyr. These are mixed results for small shareholders. Where in a good part of the occasions in summary they have chosen to market their actions, even assuming some level of losses. As may be your own case.

How should it operate?

Every time this scenario unfolds, you will have no choice but to be very attentive to what you need to do. Because in fact, you must act with exquisite speed. Not surprisingly, corporate processes develop in little space of time. It is true that the bank where you have deposited your securities portfolio will have the obligation to notify this news event, generally through a letter, and even by email. But all in all, it will not be a bad idea to be aware of what arises in the companies where you have vacant positions.

You will have little time to reflect on whether it is worth going to this type of capital increase. It can even be very beneficial to consult an expert in this type of financial operations. Or even from your frequent bank. They will give you some light so it is important that you know what you can do in these situations. Once you have a clear decision, you will need to notify the financial institution where you purchased the shares. You have a very tight deadline to make the decision.

Stock reactions

Another aspect that you should pay attention to is how the share price will evolve after the start of the capital increase. Well usually adjust their prices down. In practice, this means that you will lose money on your stock positions. In some cases, above what some small and medium investors can take care of. You will have to wait many months for the price to return to its price level. Even when it is feasible that they can never do it again in certain scenarios.

In addition, it will be more than necessary for you to analyze what your period of stay will be: short, medium or long. Unsurprisingly, it will largely determine the decision you must make from then on. Another variable that can occur is if you can go to a partial capital increase in your shares. Well yes, anyway you can. Even though something very different is whether this strategy will be profitable in investment. It is much better that you make a stronger decision: everyone or NASA. It is that simple and does not complicate these movements in the bag too much.

Do these operations cost money?

Therefore, capital increases will not require a commission or expense in their administration or maintenance. Another quite different is that to subscribe the new shares you have to buy them at a certain price. In anyone, with an important discount with respect to the price of your quotes. To the point that it can become a very profitable operation to make the most of the savings invested. It is another aspect that you should meditate very calmly and at the same time with caution.

Although it is true that these operations in the equity markets will not involve any monetary effort. The goodness of the returns that you can get if you opt for this corporate move is also evident. Because in fact, in the long run I can more harm than good for you. It will be a matter of you picking up the calculator and doing a number on what you can or cannot get out of this business decision. It is not surprising that they sell it to you from the company as something very beneficial for your positions. But it really won't be that much, far from it. It is enough that you check the last movements of these characteristics. The reality will be very different from what they tell you.

Carrying out a capital increase can be an important decision for the future of a company. But that has nothing to do with your interests as a shareholder and much less as a small investor. Even though from the point of view of commercial corporations, it represents a increase in lThe resources of society to more effectively face the challenges that arise for the future.

But at this point, it will be the right time to ask yourself what kind of implications it has for you. To the point that it is very necessary that you consider whether you should perform the operation. It can be a very difficult decision to make in such a short time. Whatever the case, it will be something very natural with which you will have to live in the equity markets. Even though in some actions it values more than in others. They will be the risks that you will have to take if in short you take positions in them. The operation may or may not go well for you. You never really know.