Share Issuance

Category: finance

The official process of a company creating and distributing new shares of stock.

Issuance is "capital creation." When a company issues shares, they are inviting new owners in exchange for cash. Too much issuance causes dilution, so boards must be very careful not to hurt existing shareholders when expanding their capital base.

Common Examples

• The company’s decision to pursue a new share issuance was met with skepticism due to the potential for significant earnings dilution.
• Share issuance is the standard method for funding massive infrastructure growth or acquiring large, competing business units.