First, let’s clarify what are direct and indirect (or deemed) shares first:
Direct shares are shares held in the director's name.
Deemed/Indirect shares occur when the shares are held in a vehicle, like a company of self-managed super fund, in which the director owns a part interest.
In Spiking App:
- Whenever there is an increase in direct shares: you will see “bought”
- Whenever there is an increase in deemed/indirect shares: you will see “increased”
- Whenever there is a decrease in direct shares: you will see “sold”
- Whenever there is a decrease in deemed/indirect shares: you will see “reduced”
An increase in the total of capital stock showing on a company's balance sheet is bad for investors because it represents the issuance of additional stock shares, which dilute the ownership value of investor's' existing shares.
On the contrary, a reduction is a process of decreasing a company's shareholder equity through share cancellations and share repurchases. The reduction of capital is done by companies for numerous reasons, including increasing shareholder value and producing a more efficient capital structure.