What is the expected price adjustment for the stock once the subscription rights are exercised?
Short answer:
Based on the information you supplied there is not enough data to calculate a specific âpriceâadjustmentâ (exârights) value for GalapagosâŻNV (GLPG) once the new subscription rights are exercised. The news release only tells us that the board has createdâŻ1,800,000 subscription rights; it does not disclose the subscription price (the price at which the new shares can be bought), the current market price of the shares, or the number of existing shares that will be outstanding after the new shares are issued. Without those three key inputs the actual adjustment cannot be computed.
How the priceâadjustment (exârights price) is normally calculated
When a company issues new shares via a rights offering, the theoretical âexârightsâ price (also called the exârights share price) is the price that a share would trade at after the new shares are issued, assuming no other market forces change. The calculation follows a simple weightedâaverage formula:
[
\boxed{P{ex} = \frac{(M \times P{0}) + (N \times S)}{M + N}}
]
where
| Symbol | Meaning |
|---|---|
| (M) | Number of existing shares outstanding before the rights issue (the âpreârightsâ share count). |
| (P_{0}) | Current market price of the stock before the rights issue (i.e., the price at which the rights are announced). |
| (N) | Number of new shares that will be created by the rights offering (often equal to the number of subscription rights issued, if each right is for one new share). |
| (S) | Subscription price â the price shareholders must pay to acquire each new share under the rights. |
| (P_{ex}) | Exârights price â the theoretical price of the stock after the new shares are issued. |
Stepâbyâstep illustration
Identify the variables
Example (illustrative):- Existing shares (M) = 120,000,000
- Current price (Pâ) = âŹ45.00
- New shares (N) = 1,800,000 (the number of rights issued)
- Subscription price (S) = âŹ40.00
- Existing shares (M) = 120,000,000
Plug into the formula
[
P_{ex} = \frac{(120,000,000 \times 45) + (1,800,000 \times 40)}{120,000,000 + 1,800,000}
]
[
P_{ex} = \frac{5,400,000,000 + 72,000,000}{121,800,000} \approx âŹ44.34
]
- Interpretation
- The âexârightsâ price would be roughly âŹ44.34 per share, lower than the preârights price of âŹ45.00 because the new shares are being issued at a price (ââŻâŹ40) lower than the market price.
If the rights are *not exercised (i.e., the holder chooses not to buy the new shares) the shareholderâs stake is diluted, and the share price would typically settle somewhere between the preârights price and the exârights price, depending on market demand for the rights.*
What we need to compute the actual number for GLPG
| Variable | Information required | Where it is typically found |
|---|---|---|
| Current market price (Pâ) | The stockâs price at the time the rights are announced (e.g., closing price on 2025â08â07). | Market data provider (e.g., Bloomberg, Reuters) or the company's own press release. |
| Subscription price (S) | The price at which each new share can be bought under the rights. | Usually disclosed in the rightsâoffer prospectus or the company's press release. |
| Number of existing shares (M) | Shares outstanding before the rights issue (often listed in the latest annual report or the âshare capitalâ line of the prospectus). | Annual report, recent 10âK/20âF filing, or the rightsâoffer documentation. |
| Number of new shares (N) | In this case, 1,800,000 (the number of subscription rights created). | Already given in the news release. |
Without the current market price (Pâ) and the subscription price (S), the formula cannot be resolved. Even if we had the market price, the effective price adjustment could differ from the theoretical exârights price because:
- Market forces (e.g., investor sentiment, broader market moves) may cause the actual trading price to be higher or lower.
- Partial subscription â If only a portion of the 1.8âŻM rights are exercised, the dilution will be smaller than the maximum theoretical dilution.
- Timing â The exârights price is a theoretical value; actual market price may be influenced by other news (e.g., earnings, macroâeconomics) that occur between the rights announcement and the exâdate.
What you can do next
- Locate the subscription price: Check Galapagosâs press release, the ârights issueâ prospectus, or the Investor Relations page on the companyâs website. The document will state the price at which the new shares can be purchased (often expressed as ââŹâŻX per shareâ).
- Determine the current share price: Use a reliable market data source (e.g., Bloomberg, Reuters, NASDAQ/NYSE quote, or your brokerage platform) to obtain the closing price on 7âŻAugustâŻ2025 (or the most recent price before the rights become effective).
- Confirm the outstanding share count: The latest annual report (or latest Form 20âF / 10âK) lists the number of shares outstanding. The number is usually presented as âtotal issued sharesâ or âtotal shares outstanding.â
Once you have Pâ, S, and M, plug them into the formula above and you will have the theoretical postârights share price. This figure is the basis for calculating the value of each right (often expressed as âexâright value = Pâ â P_exâ).
Summary
- The news does not contain enough numbers to calculate an exact price adjustment.
- The exârights price can be computed using the weightedâaverage formula shown above.
- You need three additional pieces of data: (1) current share price, (2) subscription price, and (3) existing share count.
If you can obtain those missing pieces, the calculation is straightforward, and youâll be able to quantify the expected price impact on GLPGâs share price after the rights are exercised. If you provide those numbers, I can quickly plug them in and give you the exact expected price.