The term "cash capital increase" sounds very professional, but in fact, it simply means a listed company issuing new shares to raise funds. The key question is—when a company announces a cash capital increase, does the stock price go up or down? This question has puzzled many retail investors. Today, we will start from real-world cases to thoroughly explain this logic.
Let's look at two real cases to quickly understand the relationship between cash capital increases and stock prices.
Case 1: Tesla's cash capital increase in 2020
In 2020, Tesla announced the issuance of new shares worth $2.75 billion, with a price of $767 per share, aiming to fund global expansion and new factory construction. Logically, the surge in new share supply should dilute shareholder equity, and the stock price should fall.
What was the result? Exactly the opposite. At that time, market confidence in Tesla was high, believing that this money could drive technological innovation and capture market share. As soon as the news broke, the stock price not only didn't fall but actually rose. The investors' logic was simple: having more money means being able to issue more shares.