DCBO secondary share offering

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Hi guys,

I saw on the dashboard that DCBO will have a secondary share offering. Since I’m quite new to all of this, I would if you could explain a little bit what it is. I undertsand they will put more share on the market but how will affect people who already have share or the price of them ?

As alway thanks for everything. We learn a lot from your answers.

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Asked on January 21, 2021 7:01 am
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thanks :)

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Posted by sebastien cholette
Answered on January 21, 2021 9:08 am
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Hey there! A secondary share offering is simply an offering made by a company that is already public, to sell more shares.

This increases the amount of shares outstanding, and ultimately dilutes current shareholders. For example, if a company has 10 total shares worth $10 each, the company is worth $100.

If that company decides to issue 10 more shares, it now has 20 total shares. However, nothing has changed with the company, it's still worth $100. So, your shares are now worth $100/$20 or $5.

This is very typical of an early stage growth company, and if it happens occasionally, it's nothing to get worried about. Share offerings are so the company can build up capital to fund further growth. There are some situations where share offerings can be abused (look no further than Aurora Cannabis during the cannabis boom) but if the money is being used wisely to fund further growth, investors should not be worried.

This is primarily why you see Docebo taking a hit today. It will likely consolidate for a bit on the news. But long term, we're not worried.

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Posted by Dan Kent
Answered on January 21, 2021 8:48 am