Wei Ying's pricey share allotment sparks fractional‑share dispute, offers ten‑yuan units to consolidate

WeiYing, a major server manufacturer, carried out a large‑scale rights‑offering in September of this year, distributing nearly 1,982.7946 shares of stock dividend for every thousand shares held. While the policy was intended to return earnings to shareholders through a capital increase, it unexpectedly sparked controversy in the market over the handling of fractional shares. In response to concerns from small shareholders and market commentary, WeiYing demonstrated a high level of attention and adaptability, and recently announced a formal solution. After completing the registration procedures needed to consolidate full shares, the company decided to use the shareholder register as of the final transfer date of the rights offering as the basis for its plan. It will proactively invite shareholders holding between one and fifteen shares to become designated participants, allowing these typically vulnerable retail investors to purchase one full share at a nominal price of NT$10 per share, thereby fully resolving the dispute over fractional share allocation generated by the rights offering.

The origin of the issue lies in WeiYing’s announced high‑ratio stock dividend policy. The server industry has recently benefited from a global surge in artificial‑intelligence applications and the explosive demand for cloud data‑center construction, driving exceptional performance across related supply‑chain companies. As a leading player, WeiYing’s profitability has been robust. To share its abundant earnings with shareholders who have supported the company, the board approved a massive rights‑offering, allocating 1,982.7946 shares of stock dividend for every thousand shares owned. In other words, investors with large holdings saw their asset base double instantly, but for retail investors holding only a handful of shares, the unusually high and specific allocation ratio created a large number of fractional shares—tiny holdings that could not be assembled into a whole share.

Under the traditional mechanisms of the Taiwan stock market, when listed companies conduct cash capital increases or capitalisation of earnings, fractional shares arising from the allocation are typically offered to designated parties at par value, or sold through a public market process. Historically, many firms have allowed large shareholders or institutional investors to purchase these fractional interests. Although this practice complies with regulations and administrative procedures, it can generate a perception that “the benefits go to the big players,” especially when the allocation ratio is high and the fractional shares hold substantial value. Consequently, small shareholders have voiced complaints that their rights are not adequately protected. The fractional‑share controversy faced by WeiYing highlights the gap between Taiwan’s rapidly growing capital market, its increasingly diversified shareholder base, and the traditional administrative handling methods that may fall short of safeguarding minority‑shareholder interests.

To quell the dispute and demonstrate corporate governance goodwill, WeiYing, after careful evaluation, adopted a highly creative remedial measure. According to the latest company announcement, once the registration for consolidating full shares is completed, WeiYing will directly target the smallest shareholders—those holding fifteen shares or fewer—and offer each household the right to purchase one whole share at a nominal face value of NT$10. Essentially, the rights that might otherwise have been absorbed by a large shareholder are returned precisely to the grassroots retail investors who need them most. Given WeiYing’s current high market price, the ability for small shareholders to acquire a valuable share for only NT$10 represents a tangible economic benefit and underscores the company’s commitment to treating all shareholders fairly.

The announcement also includes strict safeguards to prevent misuse by opportunistic investors who might seek arbitrage or speculative gains. WeiYing explicitly states that the subscription rights offered to shareholders holding one to fifteen shares are exclusive to the listed shareholders on the designated register and may not be transferred. This anti‑abuse provision ensures that the benefit reaches the loyal small shareholders who already own the company’s stock, rather than speculative entrants who might try to profit after the news becomes public. Through this mechanism, WeiYing not only resolves the immediate fractional‑share issue but also sets a positive example of respecting minority‑shareholder rights in the capital market.

From a corporate social responsibility and governance perspective, WeiYing’s handling of the rights‑offering fractional‑share controversy provides a valuable lesson for listed companies in Taiwan. As the proportion of retail investors in the Taiwanese market continues to rise, investor awareness of rights is also increasing markedly. Companies can no longer rely solely on compliance with legal standards when dealing with dividend distributions and capital changes; they must also consider public perception and the substantive experience of all shareholders. WeiYing’s proactive adjustment—delegating subscription rights to the smallest shareholders—not only averts a potentially larger public‑relations crisis but also strengthens shareholder loyalty and builds a more solid foundation of trust for the company’s long‑term development.

(Source: Central News Agency)