(1) A decrease in the proportion of income to which each shareholder is entitled, (2) A decrease in the % ownership of individual shareholders. Bloopers & Blunders: Value Dilution Caused By Acquisitions: AOL, CompuServe
Issues of new shares made other than on a pro rata basis to existing shareholders and particularly placements offered to outsiders at a price which is less than either the market value or the net tangible asset backing of equivalent existing shares.
Dilution can be caused by a change in the financial structure of a company, in particular, following a financial operation, and it usually constitutes a lowering of the profit per share or a reduction of the percentage of capital that a shareholder owns.
Reduction of existing investors' interest in a company through the issuance of new shares, or securities that may eventually convert into new shares.
The change in earnings per share or book value per share that would result if all warrants and stock options were exercised and all convertible securities were converted. see also antidilution provision.
A reduction in the percentage ownership of a corporation by existing stockholders that occurs when a company issues additional shares. Dilution also occurs when convertible securities are converted or warrants and employee stock options are exercised.
The process by which an investor's percentage holding of shares in a company is reduced by the issuance of new securities (see paragraph 8, Section IV above).
Dilution is the decrease in ownership (effecting share price and earnings per share) that current owners experience when new shares are issued. Stock option plans have a direct impact on dilution because when employees exercise their stock options, it is as if more shares have been issued. The existing shareholders are therefore diluted. During salary negotiations, some employees ask about the potential dilution of their shares in future financing rounds and other events. See also overhang.
A general phrase, describing the fact that as more shares are issued by a company, the interests of existing shareholders will be diminished. The specific impact is that the earnings per share of the company may be reduced as a result of the increased number of shares. A more specific meaning is used in the context of Fully Diluted Earnings per Share.
When more shares are issued, the value of each share is diluted, unless the total assets of the business are increased. See options .
the reduction in the ownership percentage of current investors, founders and employees caused by the issuance of new shares to new investors.
the effect of adding to the number of shares outstanding, which reduces the value to existing shareholders of earnings and assets.
The impact of a transaction that reduces a company's earnings per share.
Dilution occurs when an investorâ€(tm)s percentage in a company is reduced by the issue of new securities. It may also refer to the effect on earnings per share and book value per share if convertible securities are converted or stock options are exercised.
Either the percentage reduction of ownership in a company resulting from the sale of additional shares of stock, or in the difference between the price paid by investors in either a private-placement or public financing, and the tangible book value per share prior to the offering.
Dilution bodes bad news to investors as it usually results from the sale of additional shares by a company who has not acquired any new assets. Basically, after dilution, each share has become a smaller stake in ownership of the company.
The reduction in earnings or the value of a stock that can occur in a merger when more shares are issued.
A decrease in the equity position of a shareholder when additional shares are issued
Reduction in per share participation in net earnings and ownership through an increase in issued stock.
Can refer to the watering down of an equity stake in a company or the share of earnings in the company as a result of an increase in the number of shares being issued.
A shareholder's stake in a company's equity is diluted when new shares are issued. UK shareholders are protected from the worst effects of dilution by pre-emption rights.
The change in the earnings per share that results when all warrants and stock options have been exercised and all convertible securities have been converted.
A term typically used in discussing the impact that a transaction has on a company's earnings per share. For example, when an acquisition is made, the financing costs associated with the acquisition may exceed the profits gained from it, in which case there is a dilution of earnings.
the reduction in earnings associated with the hypothetical conversion of convertible securities into common stock. Also, in the context of a discussion of a merger or acquisition, the reduction in share earnings estimated to occur as a result of the merger or acquisition.
Issuing additional shares, thereby reducing proportional ownership of existing shareholders.
Dilution from an accounting perspective is the net difference between the purchase price per share paid by a new investor to buy a security from the company and the tangible book value per share of the company prior to the offering. Dilution from an investor perspective is the change to an investor's percentage ownership in a company that results from a subsequent issuance of additional equity securities.
The ratio of credit notes to invoices you issue.
A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities.
The reduction in the percentage size of one's shareholding through the issue of new capital.
In relation to an ESOP, the reduction of the percentage of share ownership held by existing shareholders in a company by issuing shares or rights to shares under the ESOP.
Diminution in the proportion of income to which each share is entitled.
Reducing the actual or potential earnings per share by issuing more shares or giving options to obtain them.
A decrease in the value of a company's shares caused by the issue of treasury shares.
The change in earnings per share or book value per share, resulting from the sale of additional shares.
When a fund isÂ single priced, the prices of itsÂ shares are calculated using theÂ mid-market prices of the underlying assets held by the fund. However, the actual cost of purchasing or selling a fundâ€(tm)s assets and investments may deviate from the mid-market value used in calculating the share price due to dealing charges, taxes, and any spread between the buying and selling prices of the investments. These costs may have an adverse effect on the value of the fund known as â€˜dilutionâ€(tm). The FSAâ€(tm)s regulations allow the cost of dilution to be met directly from the fundâ€(tm)s assets (which may affect the performance of the fund) or to be recovered from investors on the purchase or redemption of shares in the fund.
What happens to the underlying value of shares after new shares are created and issued. If total capitalization doesn't change, additional shares mean each one is worth less, which is why existing stockholders at times oppose options
When a company issues more shares, the value of each share is "diluted" - unless the total assets of the business are increased by obtaining cash or other assets.
Effect on earnings per share and book value per share if all convertible securities and stock options were exchanged for common shares. Companies provide fully diluted earnings per share information to indicate to shareholders the total potential dilutive effect to earnings.
the effect on earnings if all warrants or stock options were exercised or if all convertible securities were converted. The dilutive effect takes place because the number of shares are increased while the total earnings remain the same, thus lowering the Earnings per Share.
the decrease in relative ownership among existing investors as additional shares are issued.
Effect on earnings per share and book value per share if all convertible securities were converted or all warrants or stock options were exercised.
The reduction in percentage ownership of the company that investors suffer due to subsequent funding rounds.
The effect on a purchasers' common equity interest caused by disparity between the public offering price and net tangible book value per share immediately preceding the offering.
When a company issues new shares, this will lower the percentage of ownership for current shareholders.
Reduction in common earnings per share should convertible securities are converted, stock options and warrants are exercised or other shares are issued.
The decline in the proportional value of the stock holdings of a company's shareholders as a result of the issuance of additional shares, the resulting change in ownership percentages and the control arising from such percentages.
issuing new shares, which effectively reduces the percentage of ownership for current shareholders
The effect of reducing existing shareholder interest in a corporation when new shares are issued.
A reduction in the fraction of a firm's equity owned by the founders and existing shareholders associated with a new financing round.
Effect on earnings per share and book value per share if all the convertible securities are converted and all warrants and stock options were exercised. Also The impact on a pooled fund of transaction costs due to investors' buying/selling.
reduction in the strength of a liquid by mixing it with an appropriate quantity of water.
If a company issues new stock, the earnings per share and the book value per share decline. This happens because earnings per share and book value per share are calculated by dividing the total earnings or book value by number of existing shares. The larger the number of shares, the lower the value of each share. Lower earnings per share may trigger a selloff in the stock, lowering its price. That's one reason a company may choose to issue bonds rather than new stock to raise additional capital. If two companies merge, or a company buys one or more other companies, earnings may be diluted if they don't increase proportionately with the total combined number of shares in the newly created company. Further, dilution can occur if outstanding warrants and stock options on an individual stock are exercised, and if convertible bonds and preferred stock the company has issued are converted to common stock. Companies must report the worst-case potential for such dilution, or loss of value, to their shareholders as diluted earnings per share.
The reduction in Earnings Per Share that would result if all share 'in the money' options were exercised
The effect of all warrants or stock options being exercised or the conversion of all convertible securities on earnings.
The effect on book value per share and earnings per share if all stock options or warrants are exercised or all convertible securities are converted. See: Convertible Securities; Warrant
A reduction in the percentage ownership of a given shareholder in a company caused by the issuance of new shares.