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Does issuing CDIs affect a company's share price?

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Mrs P

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ok,
so im a newbie as the question may demonstrate..
Ive been keeping an eye on SUM for a few weeks and noted the 7.5% decline in SP today and am wondering if this is due to issuing by the company of around 2.5 million CDI's?

Does this issue of another x% shares directly influence/devalue the companies shares by a similar % ???

any help with this one would be good as i currently have BUY on these at $0.235

thanks in advance
:eek:
 
Mrs P said:
... noted the 7.5% decline in SP today and am wondering if this is due to issuing by the company of around 2.5 million CDI's?

Does this issue of another x% shares directly influence/devalue the companies shares by a similar % ??? ...
Click to expand...

Sorry to be unhelpful but I can't quite make out what a CDI actually is!

It appears to be a gain in Capital by a foreign company in return for bits of paper.
That would suggest that the value of the company has been spread over the Shareholding and the CDI's, effectively diluting the share value in the manner you suggest!

No that can't be right because the value of the company has not changed!

Agreements, i.e. CDI's have been exchanged for capital!!

:eek:
 
thanks...,
I think its similar to issuing some kind of share option...
in any effect it cant be a coincidence that the share price devalued by similar % to that of the new shares issued..
:eek:
 
A CHESS Depository Interest is just like an ADR in the US. It allows the shares in a foreign company to trade on the ASX. It doesn't effect the capital structure of the company, unless they issue CDI's to raise capital (I don't know if they are allowed to do this).
 
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