No - because the new shareholder puts in cash

Say your shirt folding business is worth £1m. And it’s got 10 shares, each worth £100k.

If a new investor comes in and pays market value to subscribe for 5 more, the shirt folding business is worth £1.5m (existing value plus the £500k cash). On day 1, the existing shareholders shares are worth the same as they were before the new investor came in.

Beyond that, the value of the shares is dictated by how well the business does, including how well it invests its extra £500k.

Posted By: SimonOTBC, Jan 28, 09:26:47