

Ask HN: Why would stockholders vote to increase # of issuable common shares? - studentrob

Why would stockholders vote to increase the number of authorized shares as in the following?<p>http://bnymellon.mobular.net/bnymellon/fds/document_1/Proxy%20Statement.pdf  ( see: recommendation #3 on page 2)<p>The only benefit I see here is if I really believe in the company's governance and want to help them from being taken over, assuming there is truly a takeover threat present.  Though ownership looks diverse to me?:<p>http://investors.morningstar.com/ownership/shareholders-major.html?t=FDS<p>Can anyone help me understand?  Surely there is something else to it.  Thanks!
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lukesandberg
This is just a guess but my intuition is that a company issues stock in order
to raise capital. So if the company has a useful investment opportunity that
would affect its long term profitability then raising the capital in equity
markets might be a good strategy. Rational investors would weigh the
possibility of stock dilution vs. long term profitability and make a choice.

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studentrob
Yea that makes sense, so obvious now that I think of it. Presumably it's
easier or more cost effective to raise capital this way than to try to issue
bonds. Thanks!

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dfc
I hope this was not a hw question for you.

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studentrob
? thanks for making my question seem dumber

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dfc
No worries;) I only said that because of your username...

