dilution

Dilution

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

Notes:

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

See also: Anti-dilution Provision, Diluted EPS, Full Ratchet, Outstanding Shares

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Dilution

Diminution in the proportion of income to which each share is entitled.

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dilution

A decrease in the equity position of a share of stock because of the issuance of additional shares. Dilution is usually detrimental to the position of existing shareholders because it weakens their proportional claim on earnings and assets. See also potential dilution.