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Discussion Starter #1 (Edited)
Hi all,

I haven't even introduced myself, but I want to ask a simple question still (I'm kind of a n00b indeed):

How does dilution of common stock work? i.e., its effects on the value of the stock, dividends, whether its a bad sign or something that is fairly common and simply happens every now and then. Good/Bad/WhoCares/etc...

Comments and personal analysis would be great...

Thanks!
 

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From Investopedia

What Does Dilution Mean?
A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities.

Investopedia explains Dilution
Adding to the number of shares outstanding reduces the value of holdings of existing shareholders.

*****
It is bad news if you do not want to share your stake in the company. Good if the company is in high debt and execution involves converting debt to equity (converting a convertible bond).
 
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