“issues of shares” refers to the process by which a company offers its shares to investors, either through an initial public offering (IPO) or subsequent offerings. While issuing shares can provide companies with capital for growth and expansion, there are several considerations and potential issues associated with this process:

1. Dilution of Ownership: When a company issues new shares, it increases the total number of shares outstanding, diluting the ownership stake of existing shareholders. This can lead to a decrease in the proportional ownership and control of the company for existing shareholders.
2. Price Dilution: Issuing new shares can also dilute the value of existing shares. If the new shares are issued at a lower price than the current market price, it can result in a decline in the company’s stock price, impacting existing shareholders’ wealth.
3. Market Reaction: The announcement of a share issuance can trigger reactions from the market, including fluctuations in the company’s stock price. Investors may interpret the issuance as a signal of financial distress or poor growth prospects, leading to negative sentiment and stock price declines.
4. Regulatory Compliance: Issuing shares involves compliance with various regulatory requirements and disclosure obligations. Companies must adhere to securities laws and regulations governing public offerings, which can be complex and time-consuming.
5. Costs and Fees: Conducting a share issuance typically incurs significant costs, including underwriting fees, legal fees, accounting fees, and other expenses associated with the offering process. These costs can reduce the net proceeds received by the company from the issuance.
6. Timing Considerations: Timing the issuance of shares is crucial, as market conditions and investor sentiment can impact the success of the offering. Companies must assess the timing of the issuance carefully to maximize investor interest and optimize the pricing of the shares.
7. Market Saturation: In some cases, repeated share issuances by a company can lead to market saturation, where investors become less interested in purchasing additional shares due to concerns about dilution or the company’s financial health.
8. Investor Perception: Share issuances can influence investor perception of the company’s growth prospects, financial stability, and management credibility. Poorly executed or timed issuances may erode investor confidence and affect the company’s reputation in the market.
9. Alternative Financing Options: Companies considering share issuances must evaluate alternative financing options, such as debt financing, private placements, or venture capital funding. Each financing option has its own advantages, risks, and implications for the company’s capital structure and financial flexibility.
10. Corporate Governance Considerations: Issuing shares can impact corporate governance dynamics, particularly if it results in changes to the ownership structure or voting rights of existing shareholders. Companies must consider the implications for governance practices and stakeholder relationships when conducting share issuances.

Overall, while issuing shares can provide companies with access to capital and liquidity, it’s essential to carefully weigh the potential issues and considerations associated with this process to make informed decisions that align with the company’s strategic objectives and shareholder interests.