Debt issuance is an act of listed companies to issue convertible bonds to the public in order to raise funds, it is a kind of good news, to a certain extent, will promote the stock price, however, the following circumstances may cause the stock to fall before the issuance of debt.
Main force shipping
Some main forces will take advantage of the news of the issuance of convertible bonds for shipping operations, that is, before the issuance of convertible bonds in individual stocks, the main forces in the hands of the chips distributed above, and so all the chips distributed to the hands of retail investors, after the completion of the purpose of shipping, will lead to a decline in stock prices, or some investors buy shares in advance, and so near the date of registration of shares, the shares in hand to distribute to which buy positive shares to obtain the qualification of the placement of investors, to complete the shipment operation, thus causing the share price to fall.
The influence of market conditions
When the issue of convertible bonds is approved, the market is poor, investors' investment sentiment is low, and the shares are affected by the market, which will cause investors in the market to panic, thus throwing out their chips and causing the share price to fall.
Significant negative news of the stock
Before the issuance of convertible bonds, there is significant negative news about the stocks, for example, there is a significant loss in the performance of the stocks, which will cause investors in the market to panic and sell their stocks, resulting in the decline of the share price.
Promote convertible bond creditors to switch shares
The listed company wants to make the majority of investors holding convertible bonds to convert, it must ensure that the conversion price is lower than the original share price, but the conversion price is based on the original share price, so it will press the original share price before the issuance of convertible bonds to reduce the conversion price.
If the conversion price of the convertible bond is higher than the underlying stock price, then there will not be too many investors holding convertible bonds to convert, so that the company will have to pay a lot of principal and interest to redeem the bond after maturity.
Institutions and major shareholders make profits
The listed company suppresses the share price before issuing convertible bonds, but after the convertible bonds are listed, good news will be released, thus pushing up the share price and the price of convertible bonds will rise accordingly. Institutions and major shareholders who hold shares in the company are given preferential placement rights when purchasing new bonds, enabling institutions and major shareholders to receive higher expected returns from the convertible bonds.
Before the issuance of convertible bonds, investors can buy some positive shares to obtain the qualification of placement, on the subscription day, log in the stock trading software, just buy, or on the subscription day of convertible bonds, top-up subscription, after winning, just prepare the funds on T+2 days, if the funds are insufficient, it will be regarded as abandoning this subscription opportunity, and if there are 3 times of winning but not fully paid within 12 consecutive months In the event that the investor has not paid in full for three times within 12 consecutive months, the investor shall not participate in the subscription of new shares, convertible bonds and exchangeable bonds within 6 months (calculated on the basis of 180 natural days, including the next day) from the day after the receipt of the abandoned subscription declaration by the Shanghai branch of China Securities Clearing Corporation. The number of abandoned subscriptions is calculated according to the actual number of abandoned subscriptions of new shares, convertible bonds and exchangeable bonds combined.