What is the impact of dilution on shareholder value?

What is the impact of dilution on shareholder value?

Dilution occurs when a company issues more shares, reducing the ownership percentage of existing shareholders. This can lead to a decrease in earnings per share (EPS) and potentially lower stock prices.

How does dilution affect my investment?

If you're a shareholder, dilution can reduce your voting power and the value of your shares. It's important to consider how many new shares are being issued.

Are there any benefits to dilution?

Yes, dilution can provide benefits like raising capital for growth, which may lead to increased company value in the long run.

What should I look for in a company's dilution history?

Examine the frequency and reasons for dilution, such as funding rounds or acquisitions, and how it has impacted share value over time.

Can dilution be avoided?

While dilution can't be completely avoided, companies can manage it by carefully planning capital raises and considering alternative financing options.