Academy / Lessons / Shares and shareholding
Shares and shareholding
Reading the public numbers, issuing new shares against selling old ones, dividends and dilution, and the money that moves between shareholders.
- EP49
Four numbers that let you read a share: market capitalisation, PE, price-to-book, asset turnover
A company whose shares cost fifty ringgit, and one whose shares cost fifty sen — which is bigger? Most people get it wrong. This episode is four numbers, and you can work the last one out on your own company tonight.
- EP52
After a listing, does the money go into the company or into the boss's pocket?
"They raised three hundred million" — most people hear that and assume the company is three hundred million richer. Not necessarily. New shares put money into the company; vendor shares put it into that shareholder's pocket. Every unlisted company answers the same question each time it takes in a shareholder.
- EP53
Dividends, the ex-date, pre-emptive rights, and passing shares to your children
Buy a day late and the dividend is gone — that day is called the ex-date. Then two more expensive things: the pre-emptive right section 85 of the Companies Act 2016 gives you, and why one line in the constitution can switch it off; and the three roads for passing shares to your children, and what each one runs into.
- EP58
Preference shares: if you want the money back, do not lend it
"I just want to put money into the company and take it back later when business is good." That is a perfectly reasonable sentence. There is a tool in the Companies Act designed for exactly that — most SMEs have simply never used it.
- EP59
Majority, minority and approval: who may vote, and who must abstain
The boss with seventy per cent wants to sell the company's land to another company in his own name. He calls a general meeting, they vote, seven to three, carried — the procedure looks complete. But the transaction may be void. And more surprising still: in a private limited company he really can cast his own vote.
- EP71
Giving shares to a staff member: free shares, share options, and what happens the day he leaves
"Ah Ming has been with me ten years, I want to give him a bit of the company." That is a good thing. But nine bosses out of ten cannot answer this: the day he leaves, what happens to those shares? At what price do you take them back? And those two answers are settled on the day you give them to him.