Module 5 — Reacting, not predicting
Dilution, offerings and halts
6 minute read
In plain English
Companies can issue new shares to raise cash, which divides ownership across more shares. Trading can also be halted for volatility or pending news.
Why it matters
Heavy volume with a rising price sometimes precedes an offering priced below the market. Halts can resume at a very different price to where they stopped.
Example
A small-cap runs 80% on no confirmed catalyst, then announces an offering after the close and opens sharply lower.
Try this
Look up whether a stock you are watching has filed a shelf registration or a recent offering.
Common mistake
Assuming a large move without a confirmed catalyst is simply strength.
What this does not mean
Volume on its own never tells you whether the buyer is a believer or a seller preparing to issue stock.
Educational content only. Not financial advice.